PURC says new tariffs increase is to prevent power outages

Regulator of utilities in Ghana, the Public Utilities Regulatory Commission (PURC), has increased the tariffs for water and electricity for all consumer groups for the first three months of 2023.

With effect from February 1, electricity tariff would be increased by 29.96 per cent, while that of water would be increased 8.3 per cent, PURC announced in its quarterly adjustment for first three months of 2023.

The Commission said it considered exchange rate of the Cedi against the US Dollar, inflation, generation mix and the weighted average cost of natural gas before arriving at the new tariffs, while being mindful of the current difficult economic circumstances.

It explained that there was the need for prevention of extended power outages and its adverse implications on jobs and livelihoods with minimising the impact of rate increases on consumers.

PURC also explained that there was the need to avoid the potential for “catastrophic” outages for Ghana, hence, the new rates, which would last for January to March 2023.

It noted for example that since the announcement of the major tariff in August 2022, there had been a depreciation of the Cedi against the US Dollar and other major currencies.

Additionally, the weighted average inflation figure used for the major tariff had seen a four-fold increase, which, together with exchange rate movement had negatively affected the ability of the utilities to purchase critical inputs required for their operations, PURC said.

However, the Commission approved varying rate adjustments, including some reductions for selected industrial and commercial consumers as part of the ongoing restructuring of the existing water rate structure.

Per the new rates, lifeline customers who were paying a tariff of 41.90 pesewas per kilowatt hour for electricity, would now pay 54.46 pesewas per kilowatt hour, while that of residential customers would increase from GHp/kwh89.04 to GHp/kwh115.72.

Special load customers would pay electricity tariff of between GHp/kwh96.86 to GHp/kwh343.06.

For water, the tariff for residential customers increased from GHp/m3 400.16 to 433.38; sachet water producers, GHp/m3 1504.45 to GHp/m3 1800.00, with public institutions and government departments seeing an increase from GHp/m3 873.55 to GHp/m3 946.07.

Meanwhile, the water tariffs for bottled water and drink producers were reduced from the previous GHp/m3 4595.84 to GHp/m3 3000, while that of industrial service also went down from GHp/m3 1351.45 to GHp/m32000.

The Commission increased tariffs for electricity and water by 27.15 per cent and 21.55 per cent respectively in September last year in its major tariff review.

At the time, the Ghana Water Company Limited (GWCL) had requested for a 334 per cent tariff increment, while the Electricity Company of Ghana (ECG), called for a 148 per cent increment.