Be efficient, increasing tariffs won’t solve all the problems – ACEP to ECG and GWCL
The Africa Centre for Energy Policy has stated that yielding to the tariff increment demands of the Electricity Company of Ghana and the Ghana Water Company Limited is not the only solution to the problems the utility providers are facing.
Ben Boakye, ACEP’s Executive Director, advised that the utility companies must have strategies to address their numerous challenges other than expecting to address them with higher tariffs.
“The tariff adjustment alone is not the silver bullet. It is not going to solve the energy sector problems because we are getting inefficient by the day, we are wasting more money by the day,” he said.
The Electricity Company of Ghana has proposed that its tariffs be increased by 148% for 2022 and with 7.6% average adjustments between the periods of 2023 to 2026.
Their demand for a sharp increment, the ECG explains, is due to the gap between the actual cost recovery tariff and PURC-approved tariffs as well as the cost of completed projects.
They made the appeal in a document presented to the Public Utilities Regulatory Commission (PURC).
The Ghana Water Company, also in a similar document is proposing a 334% increment in its tariffs to be able to at least recover its operational cost.
Though he believes an increment is justified, Ben Boakye stated that efforts must be made to run the utility companies efficiently to drive profitability.
He then added that although previous attempts to address the underlying challenges of the utility companies have been unsuccessful, fresh efforts must be made to make the companies more efficient, stressing that the government must not continue to intervene by absorbing their losses.
“We need to have these utilities operate as a business, recover their cost at the barest minimum and function effectively. The reason why we keep making these losses is that it is the same government that is operating these companies and when the losses are created, nobody is sanctioned and there is no way to get accountability for the losses and a budget shows up to absorb the losses time and again… From where we sit, at no point should the government be intervening the way we do. We have been advocating for years for us to separate the politics from the business of the utilities.”
However, the GWCL, ECG, PURC and other stakeholders are expected to engage in a series of stakeholder meetings before a conclusion is drawn on the percentage of the tariff adjustment.
