Reasons for PURC’s 2023 tariff increment baseless – IES

The Institute for Energy Security (IES) has taken a dig at the Public Utilities Regulatory Commission (PURC) following the increment in utility prices.

The IES in a statement described the announcement as baseless.

PURC early this week announced an increment in electricity prices by about 30% and 8.3% for water effective February 1, 2023.

The Commission cited the cedi depreciation, soaring inflation and issues with power generation as reasons for approving the increment.

“The IES however considers the assumption used by the PURC on the electricity generation mix of 26.11% hydro and 73.89% thermal as baseless. That assumption amounts to giving priority to thermal power generation over hydro, given that water elevation for Bui and Akosombo generating stations (GS) have improved waterhead levels, and capable of producing over 35% of power in 2023, in IES’ estimation,” IES said in a statement.

The IES anticipated a marginal increase in tariff if more hydroelectric power is produced from the generation mix.

“Although the IES has anticipated that the average electricity end-user tariff (GHe/kWh) covering residential, non-residential and special load tariff electricity consumers would see an increase within the year, the expected increase in tariff was anticipated to be marginal should more of hydro-electric power be produce from the generation mix,” the statement said.

It thus called on the PURC to reconsider the energy mix assumption used in the tariff adjustment.

“IES therefore calls on the PURC to reconsider the energy mix assumption used in the tariff adjustment (to reflect improved water-head levels) as that has an impact on the Weighted Average Cost of Gas, which has been reviewed to $6.0952/MMBtu from $5.9060MMBtu. This, the IES believe will bring some relief to already burdened citizens, and in the face of the current economic crisis”.

However, the Mines and Energy Committee of Parliament has hinted that the management of the PURC and the Electricity Company of Ghana (ECG) will be summoned before the house to answer questions on why electricity tariffs should be increased.

The committee contends that Ghanaians demand an explanation for the proposed tariff increment.

Chairman of the Mines and Energy Committee of Parliament, Samuel Atta Akyea said, “They [PURC] should be able to explain to us why they think despite these difficulties, there should be an increase. I have not seen any rationalization for this increase, so I want to keep quiet until we as a committee find out from them what really is going on. As members of the committee, we do not have the underpinnings of this arrangement. So we need to call them, so we sit and engage them.”