Reduce Power, Water Tariffs ... By 15, 12 Per Cent Respectively - TUC Demands

Ahead of the presentation of the 2019 Budget and Economic Policy Statement today, the Trades Union Congress (TUC), Ghana, has proposed a further reduction of electricity tariff by 15 per cent.

It is also wishing that the Public Utilities Regulatory Commission (PURC) would slash water tariffs by 12 per cent in next year's review of utility tariff.

In a proposal submitted to the Commission for consideration, the union advised the commission to ignore recommendations of a recent tariff study by Fitchner Management Consulting, saying it could lead to more than 400 per cent increase in tariffs for some consumers.

"In 2019, it is expected that the price of fuel and natural gas will reduce. Inflation is also expected to decline to a single digit and the value of the Ghana Cedi is expected to be stable.

"We strongly believe that a further reduction in tariffs will stimulate economic growth that could lead to increased job creation," it said, noting that the 2018 reduction played a significant role in the growth of the economy.

In March this year, the PURC announced the reduction of electricity tariffs with Residential Customers getting 17.5 per cent; non-residential customers, 30 per cent, Special Load Tariff Customers, 25 per cent and mines, 10 per cent.

According to the PURC, the main factors that informed the reduction included consumer interest, investor interest, economic development, revenue requirement and natural Gas prices.

Others, the commission stated were re-negotiation of Power Purchase Agreements (PPAs), prudent and efficient costs of the operations of the utility companies and the impending Private Sector Participation (PSP)/Concession within the electricity distribution sector.

It however, deferred the reduction for water tariff.

The Tariff Study funded by the Millennium Challenge Cooperation and Millennium Development Authority, according to TUC, recommended that the four consumption blocks of the residential customers should be reduced to two consumption blocks of zero to 50kilowatts per hour (kWh) and 51kWh plus.

"A review of the tariff structure to levels that can be considered cost reflective", as recommended by the Fitchner Report, can lead to over 400 per cent increase in tariffs for small residential customers from GH¢0.39 /kWh to GH¢1.97 /kWh, as a result of the removal of cross-subsidies.

We would like to advise PURC to ignore this recommendation because if tariffs are increased to such levels it could lead to social unrest," the union pointed out.

TUC also urged PURC to resolve inefficiencies in the sector being passed on to consumers and ensure that the Electricity Company of Ghana (ECG) concession did not lead to higher tariffs.

The operational cost of the Befesa Desalination Plant and excess capacity of Independent Power Producers (IPP), the union said, should not be passed on to consumers.

"Consumers, especially, working people, should not be forced to pay for the cost of electricity that resulted from bad policies in the power sector", it said.

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