{"id":406175,"date":"2018-03-04T17:50:02","date_gmt":"2018-03-04T17:50:02","guid":{"rendered":"http:\/\/citifmonline.com\/?p=406175"},"modified":"2018-03-04T17:50:02","modified_gmt":"2018-03-04T17:50:02","slug":"dont-be-bullied-into-excessive-tariff-reductions-bawa-to-purc","status":"publish","type":"post","link":"https:\/\/citifmonline.com\/2018\/03\/dont-be-bullied-into-excessive-tariff-reductions-bawa-to-purc\/","title":{"rendered":"Don\u2019t be bullied into excessive tariff reductions – Bawa to PURC"},"content":{"rendered":"
A member of Parliament\u2019s Mines and Energy Committee, Edward Bawa has advised the Public Utilities Regulatory Commission (PURC) not to yield to any pressure from government to reduce tariffs beyond realistic margins.<\/p>\n
Mr. Bawa also encouraged the PURC to withstand what he termed as \u201cbullying\u201d from government and put the interest of the country ahead of political interest with regards to the adjustment of utility tariffs.<\/p>\n
\u201cI appreciate the enormity of the task before the PURC. Particularly as the Government, led by no less a person than the President of the republic, has been breathing down the Commission\u2019s neck to ensure that an electoral promise is fulfilled even if it is at the peril of the Power Sector. The Commission must be bold and stand up to bullying government and place the long-term interest of the state above a political party’s interest,\u201d he said in a statement.<\/p>\n
[contextly_sidebar id=”ziYu77skxytKZFX1HvGTEY3bKrzbkNr1″]Citifmonline.com<\/strong> had reported that PURC may not be able to reduce tariffs by the 14% margin for industrial and residential users\u00a0promised<\/strong><\/a><\/span> by President Nana Akufo-Addo.<\/p>\n Documents sighted by citifmonline.com<\/strong> indicate that the PURC is instead pushing for a 12.54% reduction in the tariffs for businesses<\/strong><\/a><\/span> instead.<\/p>\n Although Mr. Bawa, who is also the Member of Parliament for the Bongo constituency on the ticket of the opposition National Democratic Congress (NDC), said he is not against a reduction in the tariffs, he stated that it would be unfortunate for the government to mount undue pressure on the PURC in order to fulfill political promises.<\/p>\n He however admonished government to remove the taxes on utilities if they want to drive the costs for Ghanaians down, instead of putting the PURC in a tight corner.<\/p>\n \u201cI believe in tariff reduction. This is because many Ghanaians are either receiving low incomes or without any regular income. However it is wrong for government to subject the utility sector to profiteering. My proposal is that government must scrap all levies and taxes on electricity as a means of improving access and making it affordable to all Ghanaians. This is the way to go instead of the attempt to eating into the revenues of the Utility Service Providers,\u201d he added.<\/p>\n PURC meets stakeholders<\/strong><\/p>\n PURC, in February 2018, held a series of consultations with stakeholders in the sector during which some of the service providers pushed for an increased in their allocations.<\/p>\n For instance, NEDCo proposed about 200 percent increase in tariff likewise did the power distributor; VRA, enclave power, among others.<\/p>\n Below is the full statement issued by Edward Bawa:<\/strong><\/p>\n DON’T SEND US BACK INTO DUMSOR<\/strong><\/p>\n On March 2, 2018 I read a piece of news item on citifmonline with the caption: ELECTRICITY TARIFFS TO DROP BELOW GOVT’S PROPOSED 14%. As a Ghanaian I should be excited by this piece of news. But as an individual who was at the centre of things through the excruciating experience of Load Management from 2013 to 2015, it is only natural to share a few concerns with this story and draw the attention of the government and in particular the PURC to some questions that need answers.<\/p>\n The Public Utility Regulatory Commission (PURC), in pursuance of section 3a and 16 of the PURC Act 1997 (Act 538) and in line with its electricity rates setting guidelines, I am reliably informed, received tariff proposals from the Volta River Authority (VRA), the Ghana Grid Company Limited (GRIDCo), Electricity Company of Ghana (ECG), Northern Electricity Distribution Company Limited ((NEDCo), and Enclave Power Company Limited. My understanding is that VRA\u00a0 request was in respect of 128.4% upward adjustment in the Bulk Generation Tariff (BGT). On the other hand GRIDCo suggested a 62.9% increase in the Transmission Service Charge\u00a0 (TSC). ECG and NEDCo proposed a 64.9% and 204% increase in the Distribution Service Charge (DSC) respectively.<\/p>\n My information is that PURC’s review and analysis of the tariff proposal submitted by the Utility Service Providers (USP) indicate a total revenue requirement of GHc 58.138 billion to be recovered from the regulated electricity market.<\/p>\n The overall effect of the BGT, TSC and DSC is that there is \u00a0a 27.4% increase in Average End User Tariff \u2013 from GHp63.7694\/kWh to GHp81.2309\/kWh.<\/p>\n Notwithstanding the proposals by the Utility Service Providers, PURC indicates that based on the results of their own analysis and review, a 12.54% reduction in tariffs across board for all categories of consumers is possible. I am told that they are contemplating achieving this by first removing the 5% PURC benchmark Provision for uncollectibles which has been part of the revenue requirements for the Distribution Utilities and second, by taking into consideration a 31.5% growth in customer population between 2015 and 2018.<\/p>\n Notwithstanding the possible areas where the reduction will come from, \u00a0a few questions need to be answered.<\/p>\n I appreciate the enormity of the task before the PURC. Particularly as the Government, led by no less a person than the President of the republic, has been breathing down the Commission\u2019s neck to ensure that an electoral promise is fulfilled even if it is at the peril of the Power Sector.<\/p>\n The commission must be BOLD and stand up to bullying government and place the long term interest of the state above a political party’s interest. I believe in tariff reduction. This is because many Ghanaians are either receiving low incomes or without any regular income.<\/p>\n However it is wrong for government to subject the Utility sector to profiteering. My proposal is that government must scrap all levies and taxes on electricity as a means to improving access and making it affordable to all Ghanaians. This is the way to go instead of the attempt to eating into the revenues of the Utility Service Providers.<\/p>\n <\/p>\n EDWARD ABAMBIRE BAWA<\/p>\n MP, BONGO AND A MEMBER OF THE MINES AND ENERGY COMMITTEE.<\/p>\n –<\/p>\n By: Godwin Akweiteh Allotey\/citifmonline.com\/Ghana\n
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