Electricity Tariff Increase – Is Public Utilities Regulatory Commission (purc) Truthful?

Recently the Public Utilities Regulatory Commission (PURC) announced tariff increases for water and electricity. In their undated press release (available at their website), several reasons were given for the increase in electricity tariffs. One of the reasons caught the eye of yours truly because reading PURC’s press release, they said it was the main reason for the 59.2% increase in electricity tariffs – Generation Mix. PURC said in paragraph 7 of their press release “The adjustment in Tariff is LARGELY driven by a shift in Generation Mix from about 58.0% Hydro and 42.0% Thermal in 2013, to about 27.0% Hydro and 73.0% Thermal in 2015”. Is this the truth or it is just a ploy by PURC to hoodwink Ghanaians into accepting the unrealistic tariff increase? So, I set off to confirm these facts as put out by PURC. What I found is rather surprising.

First of all, since 2009 PURC has not posted any annual report on its website which used to be the norm from 2001 to 2008. Secondly, the proposals submitted by the utilities to PURC are still not on their website. It is only the 2013 proposals that are still on the PURC website. The question is, why would they keep the proposals to their chest and later post them when we don’t need them again? Could they be hiding something from us? Again, I tried requesting for these proposals through the email address indicated on their press release ( [email protected] ) and I was shocked to read this “Sorry, we were unable to deliver your message to the following address. < [email protected] >: No MX or A records for purcghana.com”. Hmmmm... I said to myself and proceeded to search for what I needed. Thanks to Volta River Authority (VRA) and the Energy Commission, I found what I wanted. The proposal VRA submitted to PURC in August, 2015 and the accompanying presentation for the public engagement (I believe) to justify the tariff increase were on the website of VRA and their annual reports too were up-to-date. Data on generation mix is also freely available on the Energy Commission’s website. These are the facts on Generation Mix as contained in the VRA proposal to PURC in a graph titled “Energy Generation by Sources”.

These figures represent the generation percentages of each source and if added should give 100% for each year. Some years do not and it can be explained by the rounding up of the figures to the nearest whole number. As you can see from the table above, in 2012 hydro accounted for 67% of the total generation whiles others accounted for 33%. In 2013, hydro accounted for 64% (Bui and VRA hydro combined) whiles the other sources accounted for 36% (Compare with what PURC says as quoted above). In 2014, hydro accounted for 65% whiles the other sources accounted for 35% of total generation. In 2015 as at September 30^th, VRA says in that proposal that hydro accounted for 52% whiles the other sources accounted for 48% (Again, compare this with what PURC said in their press release as quoted above).

To ascertain the veracity of these figures, I went further to skim through the annual reports of VRA and some energy data from the website of the Energy Commission. In the Fifty-second Annual Report and Accounts for VRA for 2013, this is what is said and I quote; “Hydro generation currently accounts for 60 percent of the total system supply”. This statement is repeated in the Fifty-third Annual Report and Accounts for 2014. The Chairman’s Statement in the 2013 Annual Report and Accounts of VRA says “As a reliability-focused organization planned preventive maintenance of auxiliary equipment at both plants at Akosombo and Kpong were 100% accomplished. This enabled us to rely on our hydro facilities to deliver 61% of the total system supply”.

In a publication by the Energy Commission of Ghana in April 2015, titled National Energy Statistics 2005 – 2014, table 3.2 gives details of the electricity generation by plant from 2005 to 2015. The source of the data, according to the Energy Commission, is the Ghana Grid Company (GRIDCo). For the purpose of this article, I will restrict myself to 2012, 2013 and 2014. In 2012, total power produced was 12,024GWh. Out of this figure, hydro (i.e Akosombo and Kpong) contributed 8,071GWh representing about 67% whiles thermal contributed 3,953GWh representing 33% (This is the same as contained in VRA’s proposal to PURC).

In 2013, total power produced was 12,870GWh. Out of this figure, hydro (i.e Akosombo, Kpong and Bui) contributed 8,233GWh representing about 63.97% whiles thermal contributed 36.01% with solar contributing 3GWh of power. In 2014, total power generated was 12,963GWh. Hydro contributed 8,387GWh representing 64.70% whiles thermal contributed 4,572GWh representing 35.27% with solar also adding 4GWh. These figures all perfectly agree with what VRA presented to PURC.

What is the point in boring you with these figures at all? The point is simple. Public Utilities Regulatory Commission (PURC) lied when they said Generation Mix largely influenced the increase in electricity tariffs. This is a big deal for me because with my years in public service, I have realised that this is our bane as a country. Lies here, lies there, lies everywhereeeeee! PURC lied to justify an increase in electricity tariff for which ordinarily they have no reasons to increase.

What baffles my mind is that now it appears to me all our state institutions have thrown integrity to the dogs. Even if you believe Ghanaians don’t read and will not find out, what about the international community? You just look into our face and issue a press statement available on the World Wide Web, giving misleading information to justify a common tariff increase. Politics of misunderstood concepts I called it. It is terrible and this is my point for the total overhaul of the public sector.

Truth stands. Silence is not an option when things are ill done – Lord Denning

I rest my case but I shall surely be back.
Charles A. Akurugu