Electricity tariff reduction takes effect

BY: Salomey Appiah-Adjei

Consumers of electricity have started enjoying the reduction in tariffs announced by the Public Utilities Regulatory Commission (PURC) in March this year.

The tariff reduction, which took effect from April 1, this year, was to have residential consumers enjoy a 17.5 per cent reduction, while non-residential consumers were to experience a 30 per cent reduction.

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Special load tariff customers (those who use more power, such as industries) were also to enjoy a 25 per cent tariff reduction, while the mines were to enjoy a 10 per cent reduction.

Average percentage reduced

However, the Public Relations Manager of the ECG, Mr William Boateng, said consumers would not enjoy the exact amount of reduction in tariffs announced earlier due to some statutory levies.


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In an interview with the Daily Graphic, Mr Boateng explained that the addition of statutory levies and other fixed charges would reduce the average percentage relief announced by the PURC.

He explained that the statutory levies, which included rural electrification and street light levies, represented five per cent of electricity tariffs, adding that it was not within the mandate of the PURC to review those levies, except Parliament.

Consequently, he said, depending on consumers’ consumption rate, they would experience the reduction slightly lower than the percentages announced.

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“For instance, if a customer buys 300 units of power, the old charge would be GH¢189.47 but the new charge is GH¢166.66, representing a change of 12.04 per cent. The customer now saves about GH¢22.81,” he explained.

Refund

Additionally, Mr Boateng said, although the PURC announced that the tariff reduction was supposed to take effect from March 15, 2018, consumers started experiencing the adjustments this month.

For postpaid customers, he said, their monthly bills would reflect the tariff reduction from March 15, 2018, while for prepaid customers, the programming of the billing system would refund the reduction from the implementation date of March 15 to March 31 when they deposited cash or purchased electricity from April 1 onwards.

“On customers’ first visit in April, the prepayment will detect the aggregate purchase for the month of March and compute the reduction due them from the effective date of March 15 to 31 and be refunded on the next visit to the vending point,” he explained.

The second vending, he added, could be done the same day of the first vending, provided the credit or deposit had been loaded onto the meter to get the refund.

To ensure transparency and clarity, Mr Boateng said, the ECG had compiled all unit consumption and expected cost in a “reckoner” which explained how the tariff was calculated and billed, regardless of the type of metering, and it would be displayed at all district offices and revenue centres nationwide to guide customers on their electricity purchases.

According to him, the reduction in tariffs would encourage customers to consume more electricity, since it was cheaper to buy more.

Background

On Monday, March 5, 2018, the PURC announced a general reduction in electricity tariffs after extensive stakeholders’ consultations in the sector, as well as detailed analysis of proposals tendered in by companies in the power distribution chain.

In a statement issued to announce the reduction, the commission stated that the key objectives for the tariff review were to ensure efficient and equitable tariffs and also make them relevant to the current socio-economic environment.

It said in arriving at the decision to review electricity tariffs, it considered consumer interests, investor interests, economic development, revenue requirement, natural gas prices, renegotiation of power-purchase agreements (PPAs) and prudent and efficient cost of the operations of the utility companies.

“The commission also took into consideration the impending private sector participation (PSP) concession within the electricity distribution sector,” it said.