The Minority in Parliament suspects that the Public Utilities Regulatory Commission’s (PURC) move to increase utility tariffs is a back-door approach to meeting the International Monetary Fund’s conditionalities in the energy sector. PURC on Monday, January 16, 2023, announced an increment in utility tariffs in the first quarter of 2023 effective February 1, 2023, despite admitting the present economic challenges.
While the end-user tariff for electricity has been increased by about 30%, that of water has also seen an upward adjustment of 8.3 percent following the conclusion of the PURC’s regulatory processes for quarterly adjustments.
In a statement signed by the Ranking Member of the Mines and Energy Committee of Parliament, Mr. Jinapor expressed the minority group’s concern that the decision will adversely affect Ghanaians, particularly residential customers. “We also note that the increment is on account of the worsening Ghanaian currency (Ghana Cedi) against other major currencies. Recently, the Cedi has witnessed a free fall with the local currency rated as the second worst-performing currency in the world… This will automatically worsen the plight of the already impoverished Ghanaian,” he added.
Mr. Jinapor also said he has noticed an attempt by the PURC to skew the generation mix in favour of thermal power as against hydro to create an unfair price hike to the detriment of consumers. He argues that PURC is not the technical regulator and “hence, cannot arbitrarily skew the thermal/hydro mix contrary to the projections by the Energy Commission, which is the technical regulator of Ghana’s energy sector.”
“From the available data, all the 3 hydro dams have witnessed very high elevations at the beginning of 2023 and are therefore in better positions to produce more hydroelectricity compared to the previous years. We are confident of hydro generating not less than 35% based on the Energy Commission’s projections. We, therefore, reject the 26% Hydro mix used in computing the recent tariff adjustments.”
The minority group demanded that PURC refrains from “such unorthodox methods, which, by all intends and purposes, is a back door approach to meet the IMF conditionalities in the energy sector.”