Tariffs for electricity and water increased

In an announcement likely to unleash public backlash, the PURC has okayed an increase in electricity tariffs in a country where power is often non-existent and erratic.

Electricity has gone up by 2.63 percent and water by 1.06 percent.

According to a statement released by the PURC, the increase is to help the service providers raise monies to undertake maintenance works.

The Commission says it expects the power situation to normalize once the power barges arrive in the country.

The new tariffs will take effect on the 1 st of April.

Below is the full statement
PUBLIC UTILITIES REGULATORY COMMISSION PRESS RELEASE ON THE 2 ND QUARTER 2015 TARIFF ADJUSTMENT

After a careful consideration of all the factors that underpin the Automatic Adjustment Formula (AAF) and the current Electricity Supply situation, the Public Utilities Regulatory Commission has reviewed Electricity and Water Tariffs for the 2 nd Quarter 2015 starting from the 1 st of April 2015.

In calculating the Tariffs for the second quarter Automatic Adjustment Formula, the Commission arrived at an actual increase of 31.73% cumulative for electricity and 21.30% for water. However, the Commission using the Decision Variable decided to pass on a minimal Tariff increase of 2.63% for Electricity and 1.06% for Water.

This action by the Commission has been necessitated by the current electricity situation where consumers are spending extra income on the acquisition of other alternative sources of electricity. This increase is meant to preserve the current load share situation by assisting the Electricity Distribution Companies to maintain its network under the current circumstances to avoid an immediate collapse of the distribution network.

It should also be recalled that the GWCL was denied a 4.54% Water Tariff increase as a form of penalty during the fourth quarter of 2014 due to the non - compliance with Regulatory Directive, but fortunately they have fulfilled the benchmark. Therefore, the Commission has released for implementation effective April I, 2015 the gazetted water tariff for the fourth quarter of 2014.

The Commission in arriving at a Tariff decision always considers the smoothening impact of the variables of the Automatic Adjustment Formula (AAF) and does not consider spikes that are associated with the movements of Water and Electricity Tariffs.

The Automatic Adjustment Formula (AAF) is a Tariff Mechanism that seeks to track and incorporate movements in key determining factors to reflect the cost of Electricity and Water every quarter.

The following factors are considered in computing the Automatic Adjustment Formula:

Ghana Cedi US$ Exchange Rate
Inflation
Fuel Mix (Crude Oil, Natural Gas, and Distillate Fuel)

Generation Mix (Hydro and Thermal)
Power Purchase Cost
Demand Forecast