The Acting Executive Secretary of the Public Utilities Regulatory Commission (PURC), Dr. Shafic Suleman, has explained why the Electricity Company of Ghana (ECG) is proposing an increment of Distribution Service Charge (DSC1) by 225%.
According to the ECG’s proposal, this will take the tariff from its current rate of Ghana pesewas 19.0384 kilowatts per hour to Ghana pesewas 61.8028 kilowatts per hour.
Speaking at the PURC Tarriff engagement at Alissa Hotel in Accra on Tuesday September 9, Dr. Suleman mentioned some things introduced and done by the ECG in the last 3 years.
This included its transition to a cashless system, deployment of new prepaid metres, System automation project (SCADA and VIT project), Technical Loss Reduction/Voltage Improvement Projects, among others.
“The projects I have taken you through, the main reason is that, yes, we have done some of the projects, we have paid for some but a significant number of them we are yet to pay for. “ he explained.
Adding, “Therefore we need tariff, not just to pay for some of the projects but also to undertake some of the critical projects the regulator has approved for us.”
He said the regulator approved projects include Reliability Improvement Projects, Technical Loss Reduction/Voltage Improvement Projects and Commercial/Revenue Improvement Projects which they would need about USD 607 million to complete.
He further listed the expected benefits that the ECG has planned for the next 5 years if granted the tariff increment, which are;
Reliability Metrics
- 41% SAIDI reduction, with outage duration expected to reduce from 32.5 hours to 19.2 hours by 2029.
- 44% SAIFI improvement, reducing outage frequency from 16 to 9 incidents by 2029.
Metering Infrastructure
- Deployment of 3 million smart meters for replacement and new service connections.
Financial Growth (18.18%)
- Sales projected to increase from GHS18.926 billion in 2024 to GHS22.36 billion in 2025, with average annual growth of 8% through 2029.
Operational Efficiency
- Revenue collection efficiency to rise from 87% in 2024 to 90% in 2025, with 2% annual growth thereafter.
- System losses expected to decline from 27.05% to 22% by 2029.
Dr. Shafic Sulema added that ECG continues to operate at a loss because the cost of power generation is far higher that what they earn from sales.
“All we are requesting the regulator to do is to ensure that the generation cost is a pass through cost in full,” he noted.
Dr. Shafic Sulema further explained explicitly the reasons they are asking for the increment of the tariff.
“In conclusion, the ECG is requesting for 225% in tariff specifically the DSC1 to support the deployment of smart metering technology,”
“Secondly we are requesting the regulator to approve our tariff so that we can enhance customer service delivery and also ensure ECG can continue to provide reliable and quality electricity for Ghana,”
“Finally, we want to maintain the financial stability of the company. So, Mr. Regulator please approve our tariff of 225%,” he concluded.
