Brace Yourselves For Realistic Tariffs — Dr Donkor

The Minister of Power, Dr Kwabena Donkor, has urged consumers of electricity to brace themselves for realistic tariffs because cheap power from hydro will no longer be available.

He said the only way to sustain the business of power generation was to produce power above the cost of generation in order to break even.

Speaking at a stakeholders’ meeting on local content for the power sector in Takoradi yesterday, Dr Donkor observed that it would be difficult to sustain energy generation, transmission and distribution if power was produced and sold at a loss.

I get worried

“To generate power, the country buys light crude and gas at the international market price and pays in dollars, yet billing is done in cedis.

“We are expending in dollars to sustain the sector and receiving in cedis. Therefore, it is obvious that there is a disequilibrium. Yet, at the face of all these, rational people will not even accept these facts for very emotional reasons, and I get worried.

“Every businessman will tell you that if you are not meeting your cost of operation you can only continue for a very short-term, over a period of time even your working capital will be exhausted, hence you will go bankrupt.

“Must we bury our head in the sand and pretend we don’t have a problem. Irrespective of whichever party is in power, we will face this challenge. Therefore, let us put political colours aside, which means nothing to the sector,” Dr Donkor said.

Demands of utility companies

The Volta River Authority(VRA), the Ghana Grid Company (GRIDCo), the Electricity Company of Ghana (ECG) and the Ghana Water Company Limited (GWCL) have submitted proposals to the Public Utilities and Regulatory Commission (PURC) for an upward adjustment of their respective tariffs.

While the three power providers are asking the PURC to allow them to increase their tariffs from the present 44 pesewas to 100 pesewas or GH¢1, representing more than one hundred per cent increase, the GWCL is requesting the commission to review the company’s tariff from GH¢1.78p to GH¢4.

The proposed adjustments, according to the companies, were to help them to remain in business to continue to provide quality services to the consuming public.

But consumers of electricity and water in some parts of the country have kicked against the requests by the utility providers for upward adjustment in their respective tariffs.

Put emotions aside

At the stakeholders’ meeting, Dr Donkor said although the country could change governments at will, if the fundamental problem of cost bedevilling the power sector was not resolved the problems would still be there.

“It is, therefore, important for business people and professionals to put emotions aside and address the real situation together and see how collectively we could solve the problem,” he said.

Social hullabaloo

What Ghanaians must understand, he said, was that tariffs were low when hydro was at its peak, adding that “today Akosombo is no longer in that position.”

He said it was, therefore, important to note that aside the high input for generation and the low level of tariffs, the country would be better off if realistic prices were paid.