Energy Economist at the Electricity Company of Ghana (ECG), Ebenezer Baiden, says the company will “work with what we have” to keep the power system running and satisfy customers, even though the Public Utilities Regulatory Commission (PURC) approved far less than what ECG requested in the latest tariff review.
Speaking on Joy News’ PM Express on Tuesday, he said the PURC had tried to balance the interests of customers and utilities, and ECG would now focus on delivering results with whatever revenue has been approved.
“For us, PRC has done the balancing act. Yes, though we require a number, what they say is, this is what consumers can afford. So we’re going to now take whatever has been given and then work with it,” he said.
He explained that ECG was committed to getting the best out of its allocation.
“We’re supposed to do our best out of the revenues that we’ve been given. We are in a situation where investments have been made.
“We’ve not been able to pay for it. Now we’ve been given some 9% or 10% for us to be able to recover as part of the cost of this investment and pay for it. We’re able to clean our books.”
He pointed to recent improvements in settling obligations.
“We were very happy. For example, last month, cash waterfall was able to pay for most of the invoices that came from upstream providers and then also the SOEs. So it’s looking good. We’ll work with what we have, and then make sure that we please our customers.”
Mr Baiden said ECG’s position today is still an improvement compared to the past.
“From where we are coming from and where we are today, we think that it can be better… It’s better. Whatever we have, we take it, we work with it, and make sure that we deliver services to our customers. So we have a very positive outlook that we are looking okay.”
But he admitted the 9.86% increment approved by the PURC is below what ECG needs.
When host Evans Mensah asked if it was enough, he responded, “It’s not enough. But what we say is that we always go into some form of negotiations, long-term investment. You are looking for a 225% increase in the distribution part.
“Maybe I should clarify as well. So the PURC gentleman mentioned generation, transmission and distribution. Now, the ECG portion hadn’t been looked at for a long time, so we were trying to rebase the ECG one. So that’s why you see the highest increase on the ECG portion today.”
He explained that ECG sought an overall 46% adjustment based on the combined proposals of VRA, GRIDCo and ECG.
“They are yet to engage us and then tell us whose portion is what. But in all, when you put the 2 to 5% for ECG, the 56% for VRA, and then up to 100% for GRIDCo, it all comes up to 46%. So we’re talking about a 46% adjustment that we put before PURC, and then it says, I’m doing 9.86%.”
Mr Baiden noted that government renegotiations of power contracts had influenced the tariff outcome.
“Government has renegotiated the generation cost. Therefore, the generation cost accounts for approximately 65 to 70% of the total build-up. And then, the government undertook significant restructuring and renegotiation of the power contracts, which has had a considerable impact. And based on that, we’re able to see quite some reduction in the generation component.”
He stressed that ECG’s actual share of the tariff remains small. “It’s the distribution part, which is like 11% of what customers are paying. Now we spoke about the two to 5% increase, so it’s very small and not like a big share.”
Despite these constraints, he said ECG is determined to push forward with improvements.
“I’m sure with ECG, looking forward to getting a bigger share, once we have that, we should be able to do more. In times past, look at the customer service centres. Look at the automation now; the Power App, you can report faults, you can do other things, and all these were some of the issues.”
On whether the approved tariff level is enough to keep the lights on, he was clear. “We will do our best to keep the lights on.”
Pressed again on whether the increment is truly adequate, he added, “We have said it’s not enough, okay, but we will make sure the lights are on. And if we have to even borrow to make sure we finance such services, we’ll do that.”