Electricity, water tariffs go up

The Public Utilities and Regulatory Commission (PURC) has announced an increase in electricity and water tariffs following a meeting on Wednesday by the Commission.

The increase is intended to preserve the real value of the tariffs approved for the utilities at the beginning of this year as the cedi continues to depreciate against the major trading currencies especially the US dollar.

The Corporate Affairs Director of the PURC, Nana Yaa Djantuah said the commissioners of PURC have agreed to increase electricity and water tariffs by 12% and 6.1% respectively, which is subject to a decision by the Board- the highest decision body of the Commission.

The increment, she said, will be finalised today when the Board of the PURC concludes its meeting in the next hour. But she warned consumers to expect a jump in how much they pay for utilities in the country.

She explained: “Consumers should expect an increase. At this moment, what we have done for this quarter is the 12% for electricity and 6.1% for water.

“But the commissioners right now are meeting. They have brought their decision, which I have given to my boss (CEO). When everything is done, we will come out (formally) to tell everybody what they have decided on. Within the automatic tariff adjustment formula, there is one key variable called the decision variable. Depending on the exigency of the time, the Commission can decide whether to maintain the tariffs, bring it down or increase it.

“Now what we are waiting for is the decision variable. We don’t have a figure for the decision variable at the moment. When the decision comes out, we will tell everybody.”

The increase in utility tariffs is the second time this year that water and electricity prices have gone up following an earlier adjustment in the tariffs by 9.73% for electricity and 6.80% for water in January.

B&FT understands that the upward adjustment in the tariffs is largely driven by movements in exchange rates, inflation and the demand variation.

The PURC now adjusts utility tariffs quarterly following the implementation of the automatic tariff adjustment formula.

In adjusting utility tariffs, the Commission consider Cedi-US dollar exchange rate, inflation, price of crude oil and natural gas, chemical cost, electricity cost, power purchase cost, demand forecast variations, energy generation mix and fuel mix as the key variables in determining tariffs.

Today increase in utility tariffs imply more pain in store for consumers- who are also struggling with energy supply rationing and acute fuel shortage in parts of the country following governments to pay bulk oil distributors several billions of dollars it owes them for subsidizing fuel.

It is also expected that fuel prices will imminently go up at most next week as government rounds up its meetings with GPRTU and National Petroleum Authority officials to mitigate the impact on consumers.