The Public Utilities Regulatory Commission (PURC) announced a marginal increase of 1.14% in electricity tariffs for the fourth quarter of the year.
The Commission clarified that this adjustment is part of its Quarterly Tariff Review Mechanism, which is designed to keep utility service providers financially stable and ensure that tariffs reflect key economic changes beyond their control.
The tariff review, which is undertaken quarterly, serves to maintain the real value of utility rates amidst shifts in the economy. PURC emphasized that the slight increase was necessary due to several factors that influence the cost of electricity production, including the depreciation of the Ghanaian Cedi and the prevailing inflation rate.
The Commission provided a breakdown of the key variables influencing the adjustments:
Exchange Rate Movements: The Cedi’s depreciation against the US dollar was factored into the tariff adjustments, with a projected exchange rate of GHC12.37 to $1, taking into account previous under-recoveries by service providers.
Inflation: Domestic inflation was pegged at an annual average of 12.43% for the fourth quarter, contributing to the cost pressures faced by utility companies.
Cost of Natural Gas: The price of natural gas, which remains a significant input in thermal power generation, has been maintained at a Weighted Average Cost of Gas (WACOG) of $7.71 per MMBtu.
The country’s energy mix is 28.8% hydro and 71.2% thermal. Despite price hikes, the Commission assured consumers that water tariffs will stay the same, offering some relief during electricity cost adjustments.
Despite a price hike, the Commission assured consumers that water tariffs will remain unchanged. The tariff review aims to keep utility companies financially stable and ensure reliable services. The adjustments are necessary to stabilize the electricity sector amid economic pressures.
Starting October 1, electricity bills will rise slightly.
