ECG Vows to Maintain Power Supply Despite Tariff Shortfalls

The Electricity Company of Ghana (ECG) has assured the public it will strive to maintain a stable power supply despite acknowledging that the recent tariff adjustments are insufficient to fully address its operational challenges.

Speaking on Joy News’ PM Express on Monday, Ebenezer Baiden, Energy Economist at ECG, stated that the Public Utilities Regulatory Commission (PURC) had attempted a balance, but the company will operate within the given constraints.

“For us, PURC has done the balancing act. Yes, though we require a higher adjustment, what they’ve indicated is based on what consumers can afford. So we will take what has been given and work with it,” he said.

Mr. Baiden explained that ECG is grappling with significant investment commitments. He noted the current tariff review aims to help alleviate some of this financial pressure.

“We’re supposed to do our best with the revenues we’ve been allocated. We’ve faced difficulties paying for investments made, but the current 9% or 10% increase provides some opportunity for recovery and to ‘clean our books’,” he added.

He highlighted improvements in the Cash Waterfall Mechanism, noting, “Last month, the Cash Waterfall was able to cover most invoices from upstream providers and State Owned Enterprises. Things are looking positive; we will work with what we have to satisfy our customers.”

Mr Baiden conceded that the current system isn’t perfect, but is an improvement over past situations. “From where we are coming from and where we are today, things are better… although there’s certainly room for improvement.”

When questioned by PM Express host, Evans Mensah, on whether the nearly 10% increase was adequate, Mr Baiden was blunt: “It’s not enough.” He explained that ECG’s distribution tariff hasn’t been reviewed in a considerable period, prompting a request for a more substantial adjustment.

“We were aiming to rebase the ECG tariff. The collective request from ECG (2-5%), VRA (56%), and GRIDCo (up to 100%) amounted to a 46% adjustment overall. However, the PURC approved an increase of 9.86%,” he clarified.

Government’s renegotiation of power generation contracts was also acknowledged as a mitigating factor in controlling overall costs. “Generation costs represent approximately 65 to 70% of the total expenditure. Government’s restructuring and renegotiation efforts have had a significant positive impact.”

Mr Baiden further pointed to ECG’s ongoing investments in improving customer service, citing new customer centres, automation and the Power App for fault reporting.

Regarding power stability, Mr. Baiden assured the public, “We will do our best to keep the lights on.” However, he acknowledged financial limitations, adding, “We have stated it’s not enough, but we will ensure a consistent power supply, and if necessary, we will borrow to fund these services.”

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