PURC Rejects All Long-Term ECG Projects
The Public Utilities Regulatory Commission (PURC) has revealed that the Electricity Company of Ghana (ECG) did not have any of its long-term investment proposals factored into the recently approved tariff adjustments.
Dr. Shaffic Suleman, Acting Executive Secretary of the PURC, explained that the Commission only approved funding for projects deemed critical in the short and medium term. He stated this during an appearance on Joy News’ PM Express.
According to Dr. Suleman, the current economic challenges made it impossible to fully burden consumers with the costs of ECG’s proposed investments, despite acknowledging the pressing need for upgrades and expansion within the power sector.
The PURC applied a rigorous evaluation process, requiring both the ECG and the Ghana Water Company Limited (GWCL) to thoroughly justify the impact of each proposed project. “They must indicate the outcome of the investment,” Dr. Suleman emphasized. “For instance, if they are building a BSP in a particular area, they must tell us the current load for the area, the benefit of the new investment, and, most importantly, how the new investment will influence the improvement of quality of service to the consumers.”
While ECG provided the requested justification, the Commission had to make difficult choices given the economic realities. “Unfortunately, because of the economic conditions, we couldn’t allow all those investments to pass through the tariff,” Dr. Suleman said. “We had to carefully select the most critical ones.”
He further revealed that all long-term investment proposals submitted by ECG were rejected. “As for the short-term investment, we didn’t consider them at all. The long-term investments – none of them were accepted.”
The focus, Dr. Suleman explained, remained on projects currently underway. “Medium and short-term investments, we only considered those that are ongoing, but all those yet to commence have also been taken out. What made the cut was the most important or critical investment.”
These decisions led to the 9.6% tariff adjustment approved for ECG, a percentage Dr. Suleman admitted wouldn’t necessarily guarantee smooth operations for the utility. “It will not be easy for them as well,” he conceded. “They will also be having issues as to whether more should have been allowed, but it’s a balancing act.”
Regarding the water sector, Dr. Suleman stated that the 15% adjustment for the GWCL aimed to sustain existing operations and facilitate essential upgrades. The Commission approved investments in new water quality testing laboratories, the procurement of treatment chemicals, and specific pipe extensions.
“We added a reasonable amount of investment that will allow them to be able to improve on their services,” he said. However, even with the adjustment, he acknowledged that investment remained insufficient. “The most important issue, as I’ve indicated, is the investment.”
Dr. Suleman reiterated the PURC’s commitment to protecting consumers while ensuring the stability of the nation’s utility systems, a “balancing act” he underscored as “not easy at all.”
Image Source: MYJOYONLINE
