Don’t approve new utility tariffs in these challenging times – TUC to PURC

The Trades Union Congress (TUC) has said changes in the utility sector will have far-reaching implications on households who are already reeling from the severe economic crisis confronting the country.

The Electricity Company of Ghana (ECG) has proposed that its tariffs be increased by 148% for 2022 and with 7.6% average adjustments between the periods of 2023 to 2026.

The proposed sharp increment, according to ECG, is due to the gap between the actual cost recovery tariff and PURC-approved tariffs as well as the cost of completed projects.

The GWCL also argued that while the average tariff per cubic metre in 2019 was 1.27 USD, the same was reduced to USD 1.13 as a result of cedi depreciation.

The GWCL said this has affected its ability to carry out repairs and replacements of aged and obsolete equipment and pipelines.

VRA is also asking for a tariff increase of 37%. GRIDCO and NEDCO are demanding a 48% increase in transmission charges and 113% increase respectively.

The Trade Union Congress posited that this is not the time for a major review of utility tariffs.

It said any astronomical increases in tariffs could trigger social upheavals.

“We do not need astronomical increases in tariffs in these challenging times. Rather, what we need are measures that will reduce waste to the barest minimum and infuse efficiency in the operations of the utility companies that will help to sustain them over a long period of time,” it argued.

TUC believes the way out is for the ECG to collect its revenues, stop illegal connections and close the gap between its billing and electricity sales, while GWCL does more metering and stops charging flat rates.

“Government must consider absorbing some of the losses of the utilities arising out of the current levels of inflation and currency depreciation. Government must also provide the needed resources to enable the utilities to undertake the critical investments in the generation, transmission, and distribution of both electricity and water. Government must ensure a comprehensive review of the contract for the Desalination Project to make it fair to Ghana.”

“PURC must not approve the proposed tariff increases,” it added.

TUC further gave some recommendations as follows; 1. PURC must ensure that the utility companies reduce waste to the minimum.

2. The proposal to eliminate the multiple electricity tariff bands and end cross-subsidization is ill-timed.

3. There is the need for government to continue to support the utility companies to undertake some of the critical investments needed to ensure the stability of the electricity and water networks.

4. Government should address the challenges posed by the Desalination Plant once and for all.

---Citinewsroom