PURC announces significant reduction in electricity tariffs

By Kizito CUDJOE

The Public Utilities Regulatory Commission (PURC) has announced a notable decrease in electricity tariffs for consumers.

The latest adjustment will see residential consumers pay 6.56 percent less, while non-residential consumers will experience a decrease of 4.98 percent in their tariffs.

The new tariffs takes effect April 1, 2024 and will span three months, in line with PURC’s quarterly tariffs adjustment.

The PURC explains that the revised tariffs are the result of its Quarterly Tariff Review Mechanism, which considers factors such as exchange rates, inflation, electricity generation mix, and fuel costs.

“The commission, in undertaking this review also considered the competitiveness of industries and the general living conditions of the Ghanaian.

“Having considered all the underlying factors, the commission wishes to announce that there will be no change (0 percent) in the electricity tariffs for lifeline consumers (0 30kWh), as well as for residential consumers within the consumption bracket of 0-300kWh,” PURC noted in a statement.

It said that those consuming 301 kWh and above can expect an average reduction of 6.56 percent, non-residential consumers within 0-300 kWh will see no change, while those above 300 kWh will experience an average reduction of 4.98 percent.

Water tariffs unchanged

Water tariffs for all customer classes, the PURC said, will remain unchanged during the specified review period.

The reforms in the latest PURC review are as follows: Structural Reforms to Simplify Tariffs

1. Residential Tariff Bands: Reduced from four to three for simplicity in implementation, customer understanding and long-term affordability.
2. Industry Tariff Bands: Industrial bands streamlined to reward productive electricity use, resulting in a 4.88 percent reduction for Low Voltage (SLT-LV) consumers.

The commission has also merged the high voltage, medium voltage and steel companies into one band, with all classes now paying GH?1.5252/kWh leading to a 4.72 percent-point reduction in the tariff of the high voltage consumers.

3. Non-Residential Customer Tariff Bands: Streamlined to two bands, with no change for 0-300 kWh consumption and a 4.98 percent reduction for those consuming over 300 kWh.

In all, the tariff reduction and structural reform package aims to ease financial burdens on consumers, encourage responsible electricity use across industries, and ensure the continued provision of reliable services by utility providers.

The following are the factors considered in the quarterly review by the PURC:

Item Description	Unit	Q4 2023 Parameters/Assumptions December 01, 2023	Q1 2024 Parameters/Assumptions Effective April 1, 2024
Generation Mix:
Hydro	%	31.91	34.81
Thermal	%	68.09	65.19
Exchange Rate:
New Exchange rate (Projections)	GH?/US$	11.9264	12.1349
Inflation:
Projected Annual Average	%	40.43	28.27
Projected Quarterly Average	%	10.11	7.07
Fuel Price:
Natural Gas (WACOG)	US$/MMBtu	7.6426	7.6426

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