New utility tariffs take effect September 1
New utility tariffs take effect September 1

New utility tariffs take effect September 1

The Public Utilities Regulatory Commission (PURC) has approved an upward review of electricity and water tariffs for non-lifeline customers in the third quarter of 2023.

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The new tariff, which takes effect September 1, 2023, will push electricity upwards by 4.22 per cent for non-lifeline customers and 1.18 per cent rise for all other water customer groups with the exception of lifeline users.

This means the increment does not affect tariffs for lifeline end users, industrial and non-residential customers such as hairdressing saloons, barbering shops, chop bars, tailoring and dress making shops, cold stores, and other small and medium enterprises (SMEs).

The PURC maintained that its decision, as always, was guided by the ultimate interest of consumers, the financial viability of the utilities, and the general economic conditions prevailing in the country.

A statement issued yesterday and signed by the Executive Secretary of the PURC, Dr Ishmael Ackah, said the decision followed extensive deliberation and analysis.

“For the average end-user tariff for water, lifeline customers will experience no increase or change in tariff.

The commission, however, approved a 1.18 per cent increase in tariff for all other water customer groups,” it said.

Review conforms

The statement noted that the review process was in conformity with the quarterly tariff review mechanism and guidelines as communicated in the commission's August, 2022 major tariff review decision.

It added that the third quarter tariff review had become necessary to track and incorporate changes in key factors used in determining electricity, water and natural gas tariffs.

Those factors were the exchange rate, inflation, electricity generation mix and the weighted average cost of natural gas (WACOG), it said.

It further explained that the incorporation of the changes in the variables was crucial to maintain the real value of cost of supply of utility services.

The PURC stated that the review was also to reduce the cross subsidisation between industrial customers and residential customers.

“This is to address the high electricity cost for industrial customers which has been repeatedly identified in the Association of Ghana Industries (AGI) Business Barometer as a key challenge affecting the competitiveness of Ghanaian businesses in the global marketplace.

“Thus, this reduction will support the growth and competitiveness of industry, and as part of significant contributions towards the country's industrialisation drive, and enhance opportunities for job creation,” he said.

The statement indicated that the projected hydro-thermal generation mix for this quarter was maintained at 29.01 per cent for hydro and 70.99 per cent for thermal which was used in the 2023 second quarter tariff decision.

A projected inflation rate of 10.49 per cent was used for this quarter in comparison with 12.62 per cent used for the second quarter of 2023.

This indicates an average projected inflation rate variance of 2. 13 per cent.

PURC’s appreciation

It noted that the PURC was continually grateful to all stakeholders for their support as it continued to implement quarterly tariff reviews in accordance with its rate setting guidelines for the quarterly review of natural gas, electricity and water tariffs.

“The commission wishes to assure its stakeholders that it will continue to monitor the operations of the service providers to ensure quality delivery of service while balancing the interests of consumers and utility service providers,” the statement added.

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