Power ministry backs utility price hikes

The Ministry of Power has hinted it might back utility companies on the planned major tariff increments.

This follows public uproar against proposed tariff increments tabled by the Electricity Company of Ghana (ECG) and the Volta River Authority (VRA.

The two companies are proposing a more than 100 percent increment in tariffs for 2015.

The Electricity Company of Ghana (ECG) wants the current tariff of 16 pesewas per unit to be increased to 35 pesewas while the Volta River Authority (VRA) has tabled an increase from 15 pesewas to 30 pesewas per unit.

Meanwhile, the Ashanti, Northern and Eastern regions have kicked against the proposed increments following consultative meetings organized by the Public Utility Regulatory Commission in those regions.

Delivering the Keynote address at the Powering Africa Investment Summit in Accra, the Minister of Power, Dr.kwabena Donkor, said government was ready to take the tough decisions.

“We at the helm of affairs in the power sector have recognized that underlying the historic under-investment in generation, transmission and distribution has been the unattractive tariff regime,” he lamented.

According to him, Ghanaians have paid lower tariffs as compared to what is prevalent in the sub-region in the past because of the benefit of “Legacy Hydro, but “unfortunately as demand expand by about 12% per annum, the role of legacy hydro diminishes and tariffs must now reflect the actual cost of service ”

The Akosombo hydropower plants would only constitute 38% of VRA’s generation mix by December this year, which will constitute less than 30% of the country’s generation mix.

“Let me assure investors in the sector both local and foreign that the tariff question is being address and that the Ghanaian state will not shy away from taking the tough decisions that need to be taken,” Dr. Donkor stressed.