ECG Advocates for Tariff Review to Sustain Reliable Power Supply in Ghana
The Electricity Company of Ghana (ECG) is appealing to the Public Utilities Regulatory Commission (PURC) for a critical tariff review, emphasizing that a financial adjustment is essential to consolidate significant investments and maintain reliable power distribution. Over the past three years, ECG has channeled more than US$408 million into enhancing the electricity supply network and improving customer service experiences across Ghana. This substantial capital injection aims to modernize infrastructure, yet the company warns that these advancements are at risk without a responsive tariff structure, a proposal that has already garnered considerable public opposition.
The Rationale Behind ECG’s Proposed Tariff Hike
According to Dr. Charles Nii Ayiku Ayiku, the General Manager for External Communications at ECG, the company is proposing a substantial increase in its Distribution Service Charge 1 (DSC1). The recommendation is to raise this charge from 19 pesewas to GHp61 pesewas per kilowatt-hour, a change intended to be implemented incrementally between 2025 and 2029. This adjustment is presented as a necessary measure to offset the severe depreciation of the Ghana cedi, which has reportedly lost approximately 74% of its value since 2022. Such a significant currency devaluation has drastically reduced ECG’s revenue in dollar terms, almost halving its purchasing power for critical operational inputs and international obligations. Dr. Ayiku clarified that the DSC1 specifically represents the component of the electricity tariff designated to cover ECG’s crucial services in electricity distribution and retail.
This call for a tariff review highlights a common challenge faced by utility providers in developing economies, where local currency volatility directly impacts the sustainability of services requiring foreign exchange for equipment and maintenance. For ECG, securing this tariff adjustment is not merely about increasing revenue but about ensuring the long-term viability of its operations and its capacity to deliver consistent and quality power to Ghanaian homes and businesses, safeguarding the investments already made in critical national infrastructure. The decision now rests with the PURC to weigh these economic realities against public affordability concerns.
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