Why should we pay more for electricity?

BY: K. B. Asante

At a time when care of body would be so irksome and expensive and life itself not so pleasant, but for the good and generous medical care of former students and friends, I shudder at any increase in living costs.

I, therefore, agree with the leadership of the Trades Union Congress that workers will not accept any astronomical increases in utility tariffs. Secretary-General Kofi Asamoah was careful not to reject any increase in tariff.

Economic trends indicate that costs will rise, but an astronomical increase would deepen poverty; and our own President has agreed with the President of the World Bank that present levels of poverty are unacceptable and must be reduced.

Now the economic cancer is not reduced by an erudite definition of poverty and helping those very greatly affected. Poverty is reduced by growing the economy, looking well after what the people produce, and distributing the fruits of labour fairly, while assisting those who are disadvantaged by p

Reduction of poverty is, therefore, primarily a responsibility of government, the body we the people have established to maintain and promote our well-being and welfare. It is an abdication of responsibility to entrust such a major problem to a Regulatory Commission which has no power to deal with the roots of the problem. We have a problem with electricity because of an act of God (inadequate rainfall to feed the Volta dam), because of bad or not-so-good financial management by successive governments and because of lapses in management by the institution which produces and distributes electricity. 

To understand the problem, we should visit history briefly. We used to get most of our electricity from the Volta dam at Akosombo. The dam produces cheap electricity using water power. At the moment, it is said to produce only 40 per cent of our needs because there is not enough rainfall to provide the water to turn the turbines. The rest of our needs must come from oil and gas and the two cost a lot of money to buy and process.

Now we have known for a long time that the Volta dam power would not be sufficient to supply our needs. We, therefore, built a dam at Kpong and completed the Bui dam. But the rainfall pattern and perhaps other uses of water in the basin up north were causing problems. We, therefore, decided to build plants which would use oil or gas to produce energy or electricity. Now electricity from gas or oil, as already indicated, is more expensive. We should, therefore, pay more for electricity to cover:
(a) the cost of the new plants to process oil and gas
(b) the cost of oil or gas to be used to generate electricity
(c) management costs
(d) maintenance costs

Now the costs of new plants should be borne partly by the state (which means from our taxes and the like) in accordance with government economic and financial policy. Some essential enterprises may collapse if they are made to bear their full share of costs and some necessary exports may not be competitive if all production is saddled with full energy costs. It is the duty of the people’s elected government to determine the allocation of costs to promote national economic progress, while being mindful of international commitments.

Government should also ensure that the enterprise or company it has established to manage production and distribution of electricity functions efficiently. Competent people should be engaged and if they do not do their work well, they should be removed, irrespective of party or ethnic affiliations.

It is only after government has taken the difficult decisions for which it was elected by the people that it may establish institutions such as the Public Utilities Regulatory

Commission to discharge functions which can be performed by such bodies. A regulatory commission cannot satisfactorily determine the price to be paid for electricity by all consumers when past and present administrations have saddled the production organisations with debts and inefficiencies.

Electricity debt
The Electricity Company, for example, should collect debts and governments should set the example by paying (directly and indirectly) the electricity debts of government, government hospitals, state schools and colleges and the army.

Government should also take cognisance of the increase in maintaining production and distribution of electricity as a result of the fall in the value of the cedi. We the people should be mature enough to press government (which never dies) to do its duty. “The King is dead, long live the King”, the saying goes. When a government goes, another is immediately established to take its place.

It is puerile to debate incessantly which government was responsible for the present problems. The challenges must be addressed by the present government and any apportioning of blame should serve the purpose of learning what to avoid and what to do.

The people should be presented with the facts and the sacrifices expected suggested and enforced. Hopefully, in time they will exercise their electoral or selection powers better. The blame-game diverts attention from the real issues.

All the information indicates that the electricity problem is a money issue. The Volta River Authority (VRA) owes over US$100 for gas