ECG Assures Customers After Tariff Reduction

The Electricity Company of Ghana (ECG) will “work with what we have” to maintain power supply despite the Public Utilities Regulatory Commission (PURC) approving a tariff increase significantly lower than requested, according to Energy Economist Ebenezer Baiden.

Speaking on Joy News’ PM Express on Tuesday, Mr. Baiden acknowledged the PURC’s attempt to balance the needs of consumers and utility providers. He stated that the ECG will now concentrate on achieving results with the approved revenue.

“For us, the PURC has done the balancing act. Yes, though we require a certain amount, they’ve determined what consumers can afford. So we’re going to take what has been given and work with it,” he said.

Mr. Baiden emphasized the ECG’s commitment to maximizing the impact of its allocated funds. He explained that investments have been made but remain unpaid, and the current 9% or 10% increase will contribute to recovering some of these costs and improving the company’s financial standing.

“We’re supposed to do our best with the revenues we’ve been given. We are in a situation where investments have been made, and we’ve not been able to pay for them. Now we’ve been given some 9% or 10% to recover part of the cost of these investments and clean our books,” he added.

He highlighted recent improvements in settling obligations to upstream providers and State-Owned Enterprises (SOEs), noting that last month’s “cash waterfall” system successfully covered most invoices.

“We were very happy. For example, last month, the cash waterfall was able to pay for most of the invoices that came from upstream providers and also the SOEs. So it’s looking good. We’ll work with what we have and ensure we please our customers.”

Despite acknowledging the 9.86% increment is less than ideal, Mr. Baiden maintained that the ECG’s current position represents progress. “From where we are coming from and where we are today, we think it can be better… It’s better. Whatever we have, we take it, work with it, and deliver services to our customers. We have a very positive outlook,” he stated.

The ECG had initially requested an overall 46% adjustment, factoring in proposals from the Volta River Authority (VRA) and Ghana Grid Company Limited (GRIDCo). Mr. Baiden clarified that the ECG portion, which hadn’t been reviewed in some time, accounted for the largest proposed increase – a 225% adjustment for distribution.

“Maybe I should clarify. The PURC gentleman mentioned generation, transmission, and distribution. The ECG portion hadn’t been looked at for a long time, so we were trying to rebase it. That’s why you see the highest increase on the ECG portion today.”

He explained that the combined proposals of VRA (56%), GRIDCo (up to 100%), and ECG (2-5%) totaled 46%, but the PURC approved only 9.86%.

Government renegotiations of power purchase agreements significantly influenced the final tariff outcome, reducing generation costs to approximately 65-70% of the total build-up, according to Mr. Baiden.

He also pointed out that the distribution component, representing the ECG’s share, is relatively small, accounting for only about 11% of customer bills.

Looking ahead, Mr. Baiden expressed confidence in the ECG’s ability to improve, particularly with a larger revenue share. He cited advancements in customer service, including automation and the Power App for fault reporting, as examples of ongoing progress.

“I’m sure with ECG, looking forward to getting a bigger share, once we have that, we should be able to do more. In times past, look at the customer service centres. Look at the automation now; the Power App, you can report faults, you can do other things, and all these were some of the issues.”

When directly asked if the approved tariff would suffice to maintain power supply, Mr. Baiden assured the public, “We will do our best to keep the lights on.” He further added, “We have said it’s not enough, but we will make sure the lights are on. And if we have to even borrow to finance such services, we’ll do that.”

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