The Executive Director of the Africa Center for Energy Policy (ACEP), Dr. Ben Boakye says regular tariff hikes in Ghana may compel many to rely on generators since it may be cheaper than relying on the national grid.
According to him, this is an impending challenge that needs to be considered in the debate on whether utility tariffs should be increased on not.
Speaking on The Point of View on Citi TV, Mr. Boakye said increasing the tariffs Ghanaians pay to access electricity and water is not the ultimate solution to the challenges utility companies face.
“The more tariffs we pile up, the more competitive the grid becomes… Before the oil prices went up, generating your own electricity was cheaper than hooking onto the grid. We are now at the point where we are almost at par. So if you increase it [tariffs] and it becomes much more beneficial to turn on your generator, those who have generators will use it and the grid will become redundant and that also comes with its own cost,” he said.
He suggested that utility companies, particularly those within the electricity distribution chain, should concentrate on fixing challenges within their distribution system rather than chasing after tariff adjustment which will amount to nothing if the systemic problems are not fixed.
“Some balancing act needs to be done but most importantly, fixing ECG and the distribution problem is what is critical at this point because if power is sold, and you are not able to recover the money, you cannot pay GRIDCo, you cannot pay ECG for the system to function,” he added.
Ben Boakye suggested that the financial issue can be addressed by getting an investor to help improve the operations of the power company.
Don’t increase tariffs – CUTS International
Meanwhile, Appiah Adomako, the Director of CUTS International, an organization working in the area of consumer protection, has kicked against the proposal for tariff increment.
He said the utility companies making such demands should be instructed by the Public Utilities Regulatory Commission (PURC) to fix the financial loopholes in their systems before their proposal is considered.
“I still think that the regulator, the PURC, should allow these utility companies to go back and fix all the things that can be fixed at their end, collect all revenues that are outstanding before allowing them any increase in tariffs.”
He said the demand for an increment in tariffs must be thoroughly scrutinized by the PURC and must be granted based on sound reason.