Energy Consultant criticizes recent utility tariff increases as unfriendly to consumers

A private consultant in energy and infrastructure finance, Mr. Patrick Nyarko, has described the recent utility tariff hikes—14.75% for electricity and 4.02% for water—as customer unfriendly, emphasizing the need for increases to be aligned with consumers’ ability to pay and the quality of service delivered.

Speaking in a telephone interview on GBC Radio Central’s Morning Show on Tuesday, April 15, 2025, Mr. Nyarko argued that while the Public Utilities Regulatory Commission (PURC) plays a mediating role between utility investors such as ECG and Ghana Water and their customers, the current structure appears to favor one side more than the other.

According to him, the regulator’s duty is to ensure that investors are protected while customers receive fair prices and dependable service.

He further emphasized that the core of tariff regulation should also include protection of public interest, even if this is an unwritten standard. “The problem is when tariff increase becomes a political football; this is what you get. Based on analysis, the NPP government has been better managers of tariff compared to the NDC,” he stressed.

Mr. Nyarko contended that the opposition National Democratic Congress (NDC) is now facing the backlash of politicizing tariff increments during their time out of office. He noted that public dissatisfaction with the current increase was expected, especially as it came in the first quarter of 2025.

Discussing the key variables behind tariff adjustments, Mr. Nyarko listed exchange rate, fuel cost, inflation, energy mix, and under-recovery—a condition where the cost of providing a service is not fully recouped. He explained that this under-recovery is often invisible to the public but remains a critical factor in tariff reviews.

He acknowledged that tariff increments are necessary for investors to recover their costs but questioned the transparency behind the latest adjustment. “PURC ought to have made it known to the public the real value of the under-recovery left in absolute figures either in Ghana Cedis or USD, and this would have informed Ghanaians about the expected percentage upward adjustment in the next 3 months,” he affirmed.

Mr. Nyarko also pushed back against claims that the PURC operates completely independently of government influence. “The independence of the PURC isn't sovereignty, and therefore, current government can not detach itself from the PURC's tariff decisions,” he posited.

He clarified that while the PURC’s technical work may be independent, its decision-making process is heavily influenced by policymakers. “The policymakers like the current government have a bigger say in arriving at the set prices,” he stated, cautioning against misleading the public by suggesting the government is blameless in the hikes.

Justifying this stance, he added that governments, in some cases, can choose to suspend tariff adjustments altogether and pay subsidies instead. “It would be a bogus argument to suggest that the government cannot be blamed for tariff upward adjustment.”

He also expressed concern about the lack of consumer representation on the current PURC board. “He averred that current PURC Board doesn't have a consumer representation, and therefore, consumers' interests were intentionally ignored. Independence isn't sovereignty,” he ended.