Major utility tariff review imminent

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no proposals received yet – PURC 

The Public Utility Regulatory Commission (PURC) has said that all is set for a Major Utility Tariff Review this year. As a result, the Commission has concluded the framework to be used in submitting information for assessment, and to make a decision on either accepting or declining utility tariff proposals yet to be made by the utility companies.

Speaking in an interview with the B&FT, the Head of Public Relations and External Affairs at the PURC, Bawah Munkaila said: “There is news out there that PURC has received proposals from the various utility companies – ECG and Ghana Water were mentioned – with regard to tariff adjustment; I want to put it on record that, currently, the PURC has not received any proposal.

“We have started the process of a major tariff review, but we have not received proposals yet. It is a process, and there are various steps in the process. We are currently at the first step, which is the pre-filing stage – and that is when we discuss a template that the utility companies will use to file their tariff.

“The template has been discussed and agreed upon with the utility companies. That is what they will use to file their proposals, but they have not filled it yet. We are waiting to receive the proposal before the next line of action can be taken,” he said.

He explained that it is unfortunate that some parts of the country are currently going through electricity and water supply challenges, but the review must happen to help keep the utility companies in a better shape to support socio-economic development.

“The Commission has two tariff windows – the Automatic Adjustment Formula (AAF), which is periodic; and the Major Tariff Review that happens every two years. The last time we had a Major Tariff Review was in 2019, so 2021 is a year for a major review,” Mr. Munkaila said.

He told the paper that, already, processes toward the review have delayed a bit due to the yet-to-be-reconstituted board for the PURC to take some important decisions.

When asked if there is a possibility that the review can be postponed or if proposed increment agreed by stakeholders can be deferred, Mr. Munkaila said: “PURC tariff is independent; we will do our work, and if government wants to ameliorate the plight of citizens it can do so by putting a subsidy on the tariff or absorb it. We will have to take data from the utility companies and make a case as to what level of increase will be needed to keep them in operation.

“It is rather unfortunate that current challenges in the utility sector coincided with a Major Tariff Review. 2021 would have been a major tariff review anyway, but unfortunately it has coincided with happenings in the industry. However, all of that will be taken into consideration when the Commission is analysing its final data.”

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