The Electricity Company of Ghana (ECG) says it will continue to do everything possible to keep the lights on, even though the latest tariff adjustment falls short of what the company believes is needed to sustain its operations.
Speaking on Joy News’ PM Express on Monday, Energy Economist with the company, Ebenezer Baiden, said the Public Utilities Regulatory Commission (PURC) had tried to strike a fair balance in its decision, but ECG would have to work within strict limits.
“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 had major investment commitments it had struggled to pay for over the years. The small room created in the latest tariff adjustment, he noted, was intended to help clear some of those burdens.
“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 this cost… and pay for it. We’re able to clean our books,” he said.
Mr Baiden pointed to improvements in the sector’s Cash Waterfall Mechanism, saying, “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.”
He admitted that the system today is better than before, even if still constrained. “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 when pressed by host Evans Mensah on whether the nearly 10% increment was enough, Mr Baiden was clear.
“It’s not enough,” he said. He explained that ECG had sought much more, particularly because its distribution tariff had not been reviewed for a long period.
“We were trying to rebase the ECG one. So that’s why you see the highest increase on the ECG portion.”
He broke down the industry request: “When you put the 2 to 5% for ECG, the 56% for VRA, and then up to 100% for GRIDCo, all come up to 46%. So we’re talking about a 46% adjustment that we put before PURC, and then PURC says, I’m doing 9.86%.”
He noted that government renegotiations of generation contracts had helped moderate overall costs.
“Generation cost is up to about 65 to 70% of the total build up… government of Ghana did a lot of restructuring and renegotiation… so it’s had quite some impact.”
Mr Baiden also highlighted ECG’s investments in customer-facing improvements. “Look at the customer service centres. Look at the automation now; the Power App, you can report faults… and all these were some of the issues,” he said.
When asked bluntly if the tariff adjustment was enough to fully guarantee power stability, Mr Baiden offered assurance but acknowledged limits.
“We will do our best to keep the lights on,” he said.
Pressed further, he clarified: “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.”