HomeNewsElectricity And Water Tariffs To Go Up From September 1, 2022

Electricity And Water Tariffs To Go Up From September 1, 2022

Prices for water and electricity are anticipated to increase starting on Thursday, September 1, 2022.

On suggestions it received from the utility firms, the Public Utilities Regulatory Commission (PURC) conducted nationwide consultations.

According to reports by Daily Graphic, the new tariffs won’t apply uniformly, so the prices will depend on the justifications and supporting evidence put forth by the utilities and the verification carried out by the commission.

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It added that MSMEs, such as restaurants and hairdressers, would be safeguarded from paying “punitive” charges and that this would be the first review of electricity tariffs since 2017.

The Electricity Company of Ghana (ECG), which distributes electricity, had asked the PURC for permission to increase the electricity cost by 148% for 2022.

The ECG is requesting additional clearance for a 7.6% price rise on its Distribution Service Charge (DSC), which is the fee for distributing energy to Ghanaian households, for the years 2023 to 2026.

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The cost of investment projects, the current disparity between actual cost recovery tariff and PURC-approved tariffs, and the impact of macroeconomic factors such as inflation and exchange rate are all cited as causes of the high tariff increase by ECG in its multi-year tariff review proposal for the period 2022-2026.

ECG claims that the current DSC of GHS 16.10/kWh is insufficient and has negatively impacted the ECG’s financial viability as well as the overall distribution industry.

It believes that a DSC price of GHS 39.95/kWh, or a 148 percent increase, will allow it to recover the actual cost of energy distribution while remaining profitable.

The statement read: “The result of ECG’s tariff proposal for the next five years shows an average increase of 7.6 percent per year from 2023 to 2026 and an increase of nearly 148 percent over the existing DSC1 in 2022. The high increase in the DSC1 for the year 2022 could be attributed to the gap that has developed over the years between the actual cost recovery tariff and the PURC approved tariffs as well as the cost of completed projects.”

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