Electricity, Water tariffs hike: NDC govt gives with one hand but takes away with both hands – Kow Essuman

A private legal practitioner and a member of the New Patriotic Party (NPP) Kow Essuman has has criticised the Mahama administration for the water and electricity tariff increment.

Kowe Essuman makes the point that utility prices have risen by 4.75% more than the increase in public sector salaries.

“Public sector salary increase: 10%, Utility price increase: 14.75%. Utility prices have risen by 4.75% more than the increase in public sector salaries. Moreover, the salary increments have not yet been reflected in the wages of public sector employees.

“This NDC government gives with one hand but takes away with both hands. No mercy… please budget accordingly,” he wrote on his X page.

The Public Utilities Regulatory Commission (PURC) has increased electricity and water tariffs by 14.75% and 4.02% respectively.

This is contained in a press release dated April 11.

“The Commission, in their decision today at 6pm reviewed upward the average end-user tariff for electricity by 14.75% (See Table 2) and also 4.02% (See table 3) upward for water supply across board for all category of consumers,” the release said.

According to the PURC, the announcement followed its conclusion of the regulatory process for the quarterly adjustment of electricity and water tariffs for the first and second quarters of 2025.

“The regulatory process is in line with the Commission’s Quarterly Tariff Review Mechanism outlined in its Rate Setting Guidelines for Quarterly Adjustment of Natural Gas, Electricity and Water Tariffs. The Quarterly Tariff Adjustment tracks and incorporates changes in four (4) key variables namely, the Cedi/Dollar exchange rate, inflation, electricity generation mix, and cost of fuel (mainly natural gas) in electricity tariffs. The Quarterly Tariff Review Mechanism is essentially meant to avoid over- and under-recovery of revenues,” the PURC explained.

Read Also: PURC increases electricity tariff by 14.75%, 4.02% for water

It added that, “Under-recovery has negative implications for the ability of the companies to supply electricity and water to consumers and it has potential to cause outages of both electricity and water supply. Over-recovery unnecessarily overburden consumers of electricity and water. This process, therefore, enables the Commission to maintain the real value of the tariffs over adjustment period.”

It said, “For the second quarter of 2025, a Weighted Average Exchange Rate of GHS15.6974 to the USD was used for computation of the tariffs. This implied an under recovery of Ghs0.1700 from the last quarter review in 2024. The Commission used an average three-month projected inflation rate of 22.49% for the second quarter of 2025.”

The regulatory body noted that, “The applicable Weighted Average Cost of Gas (WACoG) for the second quarter of 2025 is USD 7.6289/MMBtu. This figure dropped from USD 7.8368/MMBtu, which was applied in the third quarter of 2024. The projected hydro-thermal generation mix for the quarter under review is 28.80% for Hydro and 71.20% for Thermal. A key variable that contributed significantly to the 2025 quarterly tariff adjustment was an inevitable attempt to pay half (50%) of the outstanding revenue of Ghs976Million carried over from the previous three quarters of 2024. The remaining 50% will be spread over the subsequent quarters of the year.”

The PURC observed that, “The combined effect of the cedi/dollar exchange rate, inflation and the payment of 50% of outstanding revenues from the previous quarters in 2024, is that the utility companies are bleeding from serious under-recovery. For the time value of money, utility companies just like other businesses, will need periodic reviews of their prices (tariffs) in order to remain operational.”

 

 

The post Electricity, Water tariffs hike: NDC govt gives with one hand but takes away with both hands – Kow Essuman first appeared on 3News.

Read Full Story