ECG adds voice to demand for higher tariffs

THE Electricity Company of Ghana (ECG) has joined the Volta River Authority (VRA) in its latest demand for payment of higher tariffs by the Ghanaian consumer.
It said the demand for higher cost of electric power had become necessary, since the government was not in a position to provide adequately for the company to replace its obsolete equipment.
Top officials of the company told the Daily Graphic in Accra yesterday that a proposal was sent to the Public Utilities Regulatory Commission (PURC) in October 2009, adding that that was in fulfilment of a 60-day notice it was supposed to give to the regulatory authority to enable it to make an input and give approval.
Without giving in percentage terms how much the ECG would want to charge, the Managing Director (MD), Mr Cephas Gakpo, said the company could only do that after an approval had been given by the PURC.
He explained that as things stood now, the company would need the support of the public to understand the need for them to make some sacrifices to ensure that the system for transmitting power to various areas was saved from total collapse.
He drew the attention of the public to the fact that “supply reliability has become compromised”, adding that the problems could be seen through frequent outages, interruptions, as well as low voltage in many parts of the country.
For its part, the VRA, on February 4, 2010, said the 2007 tariffs were out of date, since inflation had gone up and the cedi had also depreciated against the dollar over the years.
Adding his voice to the demand by the VRA, Mr Gakpo said the ECG was facing difficult times due to the continuous rise in crude oil prices, as well as the depreciation of the cedi against the dollar, adding that the situation had made the little gain the company made when tariffs were increased in 2007 irrelevant.
He, therefore, called on the public to support the management of the ECG to raise enough revenue.
Throwing more light on the issue, the MD noted that the same amount of money which was used to purchase 13 units of power in 2007 could currently be used for only eight units, adding that the company lost GH¢10 million in 2009 through under recovery.
He also pointed out that a lot of the equipment being used by the company to transmit power was too old and needed to be replaced, explaining that the situation had deteriorated to the extent that equipment which needed to be used as reserve to support others when there was a fault was all being used at the same time.
Mr Gakpo said there was also the need for the expansion of ECG’s operations, considering the fact that its consumer rate was growing at seven per cent per year, adding that the capacity of the equipment should double within the next 10 years, else it would fail to serve the people.
He said in addition to the low tariffs, other challenges the company was facing were the failure of some two million consumers to pay their bills, illegal connections and power by-pass which accounted for about 13 per cent of power sold out, in addition to 12 per cent loss through what he termed “technical losses”.
The MD said the ECG had put in place measures to collect all its debts but he was quick to add that even if all its debtors paid their debt, the amount would not be enough to solve the existing financial problem.