Accra, July 20, GNA- A law that would confine the Volta River Authority (VRA) to its core function of power generation has had its draft gone through the second reading in Parliament.
The bill called the Volta River Development Amendment Act 1961(Act46) is to accelerate the power sector reforms started about a decade ago.
An independent utility is expected to be established to "ensure fairness in the event of competition" under the proposed law. However, until the anticipated utility is established and operational, VRA would continue to perform the its transmission functions
According to a report of the Committee on Mines and Energy presented by Mrs Gifty Eugenia Kusi, Chairperson, "VRA will cease to distribute electricity to customers except those communities called VRA communities and bulk customers."
She said VRA would transfer its operations under the Northern Electricity Department to the Electricity Company of Ghana (ECG).
"The reforms were motivated by the realisation that there were significant obstacles hindering the efficient and effective operations and development of the energy sector.
"Among the obstacles was the inability of the power sector to attract massive capital investment."
She said the sector could not also raise its own capital due to unrealistic tariffs resulting from government subsidy and intervention.
"The reforms therefore seek, among other things, to create conditions that would attract significant private sector investments in the energy sector."
She said the reforms would remove monopoly and decentralise the structure for planning and operation of the power sector as well as improve transparency in the regulation of power utility. The modest achievements of these reforms are the creation of the regulation systems for the operation of the sector through the setting up of the Energy Commission and the Public Utility Regulatory Commission (PURC).
The Committee advised that in handing over the Northern Electricity Department (NED) by VRA to ECG, care must be taken to ensure that transfer of human resources is not done to the disadvantage of existing employees of NED.