[ 2015-12-07 ]

102.3% tariff hike on PURC’s table
An aggregate figure of 102.3% electricity tariff
increase that came out of a PURC meeting is
undergoing further discussions, until “a certain
figure that will be acceptable to the consumer and
to the utility service providers” is reached,
the B&FT has learned.“We don’t have a
timetable yet. What is happening right now is the
commissioners are still discussing the figures
that have come out,” Nana Yaa Jantuah, Director
of Public Relations and External Affairs at the
commission told the B&FT.“Last week, they [the
commissioners] had a meeting and the figure that
came out was 102.3%. So they are still discussing
to see how best to deal with the situation,” she
said.Government has been psyching up consumers for
the inevitable increase in electricity and water
tariffs, which lobby groups like the AGI and the
TUC have said are unwarranted.Power Minister Dr.
Kwabena Donkor has been insistent that the days of
cheap power are over, and that consumers should be
prepared to pay more due to the shift from hydro
to relatively expensive sources like thermal and
solar.Indeed, the cost of fuel to run thermal
plants has left the power sector mired in a web of
debt, and power shortages.Aysegul Sultan, the
225megawatt Karpower ship, will for example burn
an estimated 30,000 to 35,000 tonnes of fuel per
month -- which will cost close to US$9million.Main
power generator VRA also owes gas suppliers close
to US$400million, and is also said to require some
US$30million per month for the purchase of light
crude oil.Dr. Mohammed Amin Adam of the African
Centre for Energy Policy argues that if the VRA is
extricated from its liquidity challenges and
brings on-stream its redundant capacity, the
Karpowership will not be significant.“The
industry faces its major financial crisis. The
inter-utility debt is about US$1.5billion. VRA’s
short-term debt has risen to about US$800million,
and so you may have power coming from Karpower
barge but you may not be getting power from our
traditional barges if VRA is not able to solve its
financial crisis,” Dr. Amin Adam told the
B&FT.Asked about tariffs, Dr. Amin said he is not
against “cost-reflective” tariffs which are
necessary to get the utilities up and running.“I
am in favour of cost-reflective tariffs, not
necessarily higher tariffs. We must get the
difference between the two clear. Higher tariff is
just increasing; but cost-reflective tariff is to
ensure that the tariff really is what the
companies need to be able to produce power,” he
said.Dr. Amin indicated, however, that when the
cost-reflective tariff is given, the consumer must
have value.“There is no sense in increasing
tariffs when quality is not improving. And so if
we talk about cost-reflective tariffs, it means
that if I spend 9cents to produce a kilowatt hour
of power, make sure I get the 9cents as a consumer
back. Give me the value of the money I pay you by
ensuring that I do not have persistent outages
which will have further effects on my business.”

Source - Bus & Fin Times

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