ACEP says high tariffs are not sole solution to problems of utility companies

The Africa Centre for Energy Policy (ACEP), says agreeing to the proposals for tariff increment by the Electricity Company of Ghana (ECG) and the Ghana Water Company Limited (GWCL) does not necessarily mean that it is the sole panacea to the challenges they face.

ACEP’s Executive Director, Ben Boakye says the utility companies must have strategies to address their numerous challenges other than expecting to address them with higher tariffs.

He stated that tariff adjustment alone is not the silver bullet. It is not going to solve the energy sector problems because we are getting inefficient by the day, we are wasting more money by the day.

The Electricity Company of Ghana had proposed that its tariffs be increased by 148% for 2022 and with 7.6% average adjustments between the periods of 2023 to 2026.

The proposed sharp increment, according to ECG, is due to the gap between the actual cost recovery tariff and PURC-approved tariffs as well as the cost of completed projects.

It made the call in a document presented to the Public Utilities Regulatory Commission (PURC).

The Ghana Water Company, in a similar document, is also proposing an increment in its tariffs to be able to at least recover its operational cost.

Although he believes an increment is necessary, Ben Boakye stated that efforts must be made to run the utility companies efficiently to drive profitability.