Grid power still preferable

…despite tariff hikes

Industries in the country still prefer power from the national grid notwitstanding the recent tariff increases, Dr. Yaw Adu Gyamfi, Chief Executive of Danadams Group of Companies, has said.

Despite the substantial increment in the prices of utilities by the Public Utilities Regulatory Commission (PURC), and the resulting protests by workers and companies, Dr. Adu Gyamfi maintained that it is more cost-effective to be on the national grid than operating generators.

“Although we in the sector believe the increment will lead to high cost of operation, we are saying that it is better to have the 78 percent than to be on our generators. It will affect cost of production, we agree; but it the long run, it is easier and you’re able to operate efficiently with the national grid,” he said.

Since the 78.9 percent and 52 percent hikes in electricity and water tariffs, a number of manufacturing firms have warned they will have no option than to lay off workers as the increases raise business costs.

In an attempt to find a solution to the uproar that greeted the new tariffs, President Mahama constituted a technical working group to review the new tariffs.

The analysis made by the group indicated that in order to cover, at a minimum, the cost of generation and transmission of the utilities, tariff adjustments above 60 percent were necessary, taking into consideration the need to minimise the negative implications for the government’s budget.

Dr. Adu-Gyamfi, who is a PURC commissioner representing the Association of Ghana Industries (AGI), told the B&FT that much as the manufacturing sector is prepared to live with the hikes, the PURC must ensure that all the stakeholders in power generation deliver on their mandate without fail.

“We want to see efficiency in the system. ECG must sit up; GRIDCo must be able to distribute; and VRA must be able to produce power. You can’t tell me to pay the bill while I can’t get electricity. We want the regulator to ensure that our desired quality of service is put in place.”

PURC, in the wake of the new tariffs, charged the utility companies to improve service delivery to the public or face “stiffer penalties and sanctions”.

According to the regulator, the utility service providers should reposition themselves to deliver quality services and respond adequately to the needs of consumers by implementing appropriate mechanisms to ensure that they minimise the response time to faults that occur in the distribution network.

“It is the strong view of the commission that an increase in tariff should correspond to an improvement in quality of service, and the commission will ensure that key benchmarks for attainment of the acceptable levels of quality of service are strictly adhered to,” it said.

The commission said technical and commercial losses should not exceed 21% for the two distribution companies -- the Electricity Company of Ghana (ECG) and Northern Electricity Distribution Company (NEDCo).

The ECG has managed in the last two years to reduce its technical and commercial losses from 27 percent to about 22 percent of power distrubuted, but the regulator wants the electricity distributor to further reduce its losses.

“[The ECG should develop] an efficient billing and revenue collection effort to meet the regulatory benchmark of a 95 percent collection ratio, and address challenges associated with pre-paid meters being used by consumers,” the PURC said.