The Public Utility Regulatory Commission (PURC) says it has observed discrepancies in the Electricity Company of Ghana's revenue allocation in accordance with the Cash Water Mechanism (CWM).
This follows a request per a Consultancy Services Contract signed on October 31, 2023, between the Ministry of Energy and PricewaterhouseCoopers (Ghana) Ltd. (PwC) for the validation of ECG's Revenue and Collection Accounts.
In a directive copied to GNA, ECG was obliged to submit prescribed reports, documents, and resources to PwC to enable and facilitate PwC's analysis and submission of a final audit report to PURC.
However, ECG failed to provide critical data requested by PwC on customer billing, revenue collection data, and bank statements for the periods covered by the audit.
This situation, according to the Commission, presented a significant obstruction to the audit, transparent administration of energy sector revenues, and regulatory validation by PURC.
The Commission said through its monitoring of tariff revenue allocation by ECG, it has observed discrepancies in ECG's allocation of tariff revenue approved by PURC to sector entities (Bulk Generation Charge-BGC, Transmission Service Charge-TSC, and Distribution Service Charge-DSC).
“Among other discrepancies, ECG made zero payments to the Volta River Authority from November 2023 to January 2024. In the case of the Ghana Grid Company Ltd. (GRIDCo), ECG made zero payments in October and November 2023.
These payment inconsistencies are a serious threat to the financial stability of the energy sector. PURC's observation is confirmed by the PwC report dated February 29, 2024,” the commission said.
In May 2017, the Cabinet of the Republic of Ghana approved the Cash Waterfall Mechanism (CWM). The objective of the CWM is to ensure a fair and equitable allocation of revenues accruing from electricity tariffs approved by the Public Utilities Regulatory Commission (PURC).
The CWM mechanism is to ensure that ECG distributes the tariff revenues it collects among all sector players along the electricity value chain.
The Commission ordered ECG to comply with the CWM Mechanism and pay all tariff revenues as prescribed and allocated under the CWM to secure the financial integrity of the sector.
In respect of the provisions of the regulatory audit, the Commission ordered ECG to produce copies of all government directives for the purchase of fuel for power generation from August 2023 to date.
“The total amount of fuel ECG procured for power generation from August 2023 to date, together with fuel supply contracts, invoices, details of fuel quantities, cost, dates, and volumes delivered, and all pertinent details; details of all bank accounts and investment accounts currently operated by ECG Monthly Bank and investment statements corresponding to each account showing balances for the period August 2023 to date,” the commission said
GNA
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