Former Chief Executive Officer (CEO) of the Volta River Authority (VRA), Dr. Charles Wereko-Brobby, has accused the government of trying to usurp the mandate of the Public Utilities Regulatory Commission (PURC), by announcing an average reduction of between 13 and 21 percent in electricity tariffs for residential and industrial consumers.
The Finance Minister, Ken Ofori-Atta, stated that the government had revised the tariff-setting methodology, and the cost structure for power production when he read the 2018 budget statement in Parliament on Wednesday.
[contextly_sidebar id=”C3yaqkH4E4ttKNHVV5wtugeNT1snbIqX”]He added that, recommendation would be made to the Public Utilities Regulatory Commission in this regard, which will bring a little more relief to businesses and domestic users of electricity.
However, in an interview with Citi News, Dr. Wereko-Brobby, described this move by government as “extremely inappropriate,” adding that the government cannot make a recommendation to the PURC on possible cuts in utility costs as the Commission had the sole mandate of setting the tariffs.
“The idea that government should recommend specific numbers for tariffs is extremely inappropriate. Since 1997, we’ve had the PURC whose job it is to determine the methodology and the applicable rates, and also undertake three-monthly reviews of the tariffs in line with the changing circumstances such as price of fuel and the types of fuel mix that are being used by various generators, and the tariffs that are paid to the various generators. That is the sole purview of the PURC, and absolutely no government has got any right to recommend, let alone be specific about what reductions it should apply,” he said.
According to him, government could make proposals to the regulatory body about a possible reduction in the tariffs, citing possible changes in the cost of production.
He added however, that the final say on any adjustment of the tariffs should come from the PURC devoid of any pressure from the government.
“If circumstances have changed, and for example, government has been able to negotiate contracts with IPPs which have made the cost of producing power cheaper, it is incumbent on the government to draw the attention of the PURC to these changes in prices, and it must do so through the utilities who have got the actual contracts with the IPPs for the production of power. PURC will take a look at all this new information and make the necessary adjustments. But it is not up the government to say that they have changed the tariff setting mechanism and have collapsed the three bands into two. That is strictly not government’s business,” he argued.
“[Governments] are not supposed to make recommendations, if you make recommendations to the PURC, you don’t announce them in the budget. Proposals can be made to the PURC.”
Scrapping of 4-tier tariff system
In providing relief to the poor, who consume within the lifeline subsidies, but are likely to be living in compound houses, thus robbing of them such benefits, the current 4-tier tariff classification for residential consumers “will be collapsed into lifeline and non-lifeline consumers in phases,” Mr. Ofori Atta said.
Lifeline users currently pay 33.56 pesewas per kilowatt hour in addition to the 633.17 pesewas service charge monthly.
NDC remain sceptical
Members of the NDC, who had expressed doubts about government’s ability to reduce the tariffs remained pessimistic even after the announcement.
Minority Leader in Parliament, Haruna Iddrisu, has asked Ghanaians not to be excited yet following government’s proposed average reduction of 13 percent in electricity tariffs for residential consumers, saying it will be insignificant when approved.
By: Edwin Kwakofi/citifmonline.com/Ghana