The Electricity Company of Ghana (ECG) has made a proposal to the Public Utilities and Regulatory Commission (PURC) to increase electricity tariffs by up to 148 per cent covering 2019 to 2022.
The state power distributor also proposed an average increase of 7.6% in tariff over the next four years to cover Distribution Service Charges (DSC).
The attributed the high increase in the Distribution Service Charges
“The result of ECG’s tariff proposal for the next five years shows an approximately 148% increase on the current DSC1 in 2022 and an average increase of 7.6% year on year from 2023 to 2026.
“The high increase in the DSC1 for year 2022 could be attributed to the gap that has developed over the years between the actual cost recovery tariff and the PURC approved tariffs as well as the cost of completed projects”.
“Similarly, ECG’s proposed DSC2 shows a higher increase of 28.4% in first year (2022) while that of the subsequent years’ increases by an average of 2% from 2022 to 2026”, it added.
The management of ECG also indicated that its financial sustainability is important as it impacts on the entire energy sector.
“The financial sustainability of the Electricity Company of Ghana is important as it impacts on the entire energy sector. With the huge investment needs facing the distribution industry over the next five years, it is expected that the proposed tariff increases would inevitably be approved to sustain efficient and reliable electricity service.”
“Over the next five years, the DSC will need to increase consistently (average of 7.6%) to cover distribution cost. It is expected that the approved BGC would correspond with the commercial terms of PPAs (Power Plant Agreements)”, it added.