The Public Utilities Regulatory Commission (PURC) has revealed that none of the long-term investment proposals submitted by the Electricity Company of Ghana (ECG) made it into the latest tariff adjustment.
Acting Executive Secretary of the Commission, Dr Shaffic Suleman, stated that only the most critical short- and medium-term projects were approved.
Speaking on Joy News’ PM Express, he said the economic climate made it impossible for PURC to pass on the full investment burden to consumers, despite acknowledging the urgent need for expansion and upgrades in the power sector.
Dr Suleman said the Commission applied a strict filtering process that required ECG and the Ghana Water Company Limited (GWCL) to justify the impact of every project they proposed.
“They must indicate the outcome of the investment,” he explained.
“Assuming they are building a BSP in this particular area, they must tell us the current load for the area, the benefit of the new investment, and most importantly, how the new investment will influence the improvement of quality of service to the consumers?”
He said ECG complied with the request, but the Commission had to take a tough decision due to the harsh economic realities.
“Unfortunately, because of the economic conditions and the least of that, well, we couldn’t allow all those investments to pass through the tariff,” he said. “We have to carefully select the most critical ones.”
Dr Suleman revealed that the Commission rejected every long-term investment proposal submitted by ECG. “As for the short-term investment, we didn’t consider them at all,” he said. “The long-term investments none of them were accepted.”
He said PURC considered only medium- and short-term projects, with a focus on those that were already ongoing.
“Medium and short-term investments, we only considered those that are ongoing, but all those that are yet to commence have also been taken,” he explained. What made the cut was “the most important or critical investment.”
These decisions, he said, culminated in the 9.6% tariff adjustment approved for ECG, a figure he admitted would not make operations easy for the utility. “It will not be easy for them as well,” he said.
“They will also be having issues as to whether more should have been allowed, but it’s a balancing act.”
Addressing the water sector, Dr Suleman said the 15% adjustment for GWCL was designed to sustain current operations and support essential upgrades.
He said the Commission approved investments in new laboratories to test water quality, chemical purchases for treatment, and selected pipe extensions.
“We added a reasonable amount of investment that will allow them to be able to improve on their services,” he said.
But even that, he admitted, remains inadequate.
“The most important issue, as I’ve indicated, is the investment,” he said, adding that the PURC had to protect consumers while safeguarding system stability.
The Commission, he noted, had to strike “a balancing act, and that is not easy at all.”
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