PURC fines ECG GH¢5.86m for service delivery breaches
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PURC fines ECG GH¢5.86m for service delivery breaches

The Public Utilities Regulatory Commission (PURC) has fined the Electricity Company of Ghana (ECG) GH¢5.86 million for 163 breaches in its service delivery and obligations to stakeholders.

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The fines are to be borne by ECG Board Members who were in office between January 1 and March 18, this year. This is because, the commission determined that looking at the nature of ECG’s ownership and business, the imposition of the penalty on the utility would be counter-productive, as payment from ECG’s revenue would have a rebounding adverse effect on the quality of service and consumers who pay tariffs to the company.

“For that reason, in the interest of justice and to protect the interests of consumers, the commission shall hold the Board Members of ECG who were in office between January 1 to March 18, 2024, liable for the payment,” the commission said in an order signed by the eight-member Commissioners of the Governing Board.

ECG reacts

In response to the PURC Order, the Director of Communication of the ECG, William Boateng, told the Daily Graphic that the ECG would meet to come out with a position on the matter.

The ECG was fined for non-compliance with three actions, namely with the Cash Waterfall Mechanism (CWM), with a regulatory request for data, and with the PURC Consumer Service Regulations, 2020 (L.I. 2413). 

The commission stated that those board members were at all material times responsible for providing strategic direction to ensure the provision of safe, adequate, efficient, reasonable and non-discriminatory service to consumers.

They are to pay the fine into a dedicated fuel account under the joint control of the Ministry of Energy and the Ministry of Finance on or before May 30, this year.  “The commission will validate compliance in tandem with its Cash Waterfall validation reports and periodic regulatory monitoring,” the order dated April 15, 2024, which was served on the ECG the same day, stated.

The PURC further ordered ECG to pay GH¢446.28 million to the Category B beneficiaries under the CWM, in addition to honouring its ongoing obligations under the CWM.  The amount represents actual revenue collected and declared by ECG to the CWM, and approved by the CWM Standing Committee for payment from August 2023 to February 2024, but which remains unpaid.

“ECG shall pay the amount of GH¢446,283,706.29 before or by April 30, 2024. In the event of failure to pay by the said date, the Board Members and Management of ECG shall be held liable,” the PURC ordered. 

Submissions

According to the PURC, by order “PURCECG012024” dated March 18, 2024, it issued several directives to the ECG for compliance relating to CWM, the provision of regulatory audit data and submission of information related to operational matters, as well as the provision of other regulatory audit data.

The commission said ECG complied with eight of the directives, leaving five not complied with. The PURC said from its analysis of data submitted by ECG, there were 4,142 outages to consumers within ECG’s operational areas between January and March 2024.

Out of the number, 165 representing 3.98 per cent of the total outages, were ECG-planned outages. Further analysis showed that of the 165 ECG-planned outages, 40 were supported by public notices while 125 outages had no notices.

Further, 38 of the 40 notices did not comply with the requisite three-day statutory notice prescribed under Regulation 39 of L.I. 2413, saying, “This indicates that in 163 instances of planned outages, ECG did not comply with the law.”

Regulation 39 of LI 2413 provides that a public utility may interrupt service to a locality or service to a consumer to carry out planned maintenance, repair or installation of new equipment.

It adds that except in a situation of an emergency, the public utility shall not interrupt a service unless the public utility notifies affected consumers of the intended interruption and the approximate duration.

The commission said it requested data on ECG transformers to validate public statements made by ECG attributing system-wide outages in the distribution network to transformer overloads.

“Analysis of the data submitted showed that out of 715 transformer details submitted, 31 were loaded less than 70 per cent, 595 were loaded between 70-100 per cent and 89 were loaded above 100 per cent,” the commission found.

The data was further compared to the total outage data provided by ECG for the period January to March 18, 2024, in which the PURC established that 647 outage incidents occurred between 7 p.m. and 11 p.m., but only three were planned outages relating to transformers.

The analyses showed that the majority of the outages during the period were a result of load management operations by GRIDCo and faults unrelated to overloaded transformers.

On compliance, it said ECG partially complied with the commission’s order by honouring its obligations under the CWM (Category B) for March 2024. However, GHS¢446.28 million to be paid by ECG for August 2023 to February 2024 remained outstanding.

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It said to meet the PURC Benchmark Collection Ratio of 98 per cent, ECG should have collected tariff revenue of approximately GH¢8.82 billion based on the company’s declared sales.

The PURC further explained that to satisfy the temporary measures agreed under the CWM, ECG was expected to collect GH¢7 billion to be allocated to the sector players along the electricity supply value chain (Categories A and B).

However, the total tariff revenue ECG declared to the CWM to be allocated to both Category A and B beneficiaries was GH¢4.87 billion of which GHS¢446.28 million to be allocated to Category B beneficiaries remains unpaid by ECG.

Bank statements

For failure to submit details of all bank accounts to the commission by the stated date, the commission also imposed an initial regulatory charge of 3,000 penalty units on ECG per Regulation 45 of LI 2413, amounting to GH¢36,000, which must be complied with on or before April 22, 2024.

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Thereafter, for every working day that the requested details remain outstanding, ECG shall pay an additional regulatory charge of 3,000 penalty units, calculated daily until the date of compliance, the PURC order further directed.

Planned outages

For failure to comply with the three-day statutory notice required under Regulation 39 of L.I. 2413, the commission per Regulation 45 of L.I. 2413, imposed a regulatory charge of 3,000 penalty units on ECG for each of the 163 breaches amounting to GH¢5.86 million. 

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