Three energy providers make case for new tariffs

Backpage, Feb 9, 2010
Story: Emmanuel Adu-Gyamerah
THE Chief Executive Officer of the Volta River Authority (VRA), Mr Kweku Awortwi, has stated that arrears owed the authority by the government and the low tariffs currently being charged will bring its operations to a halt some time this year if the situation is not fully addressed and resolved.
He has, therefore, called for the settlement of the arrears, in addition to the payment of the right price by consumers, to ensure the payment of the cost of production and the provision of adequate maintenance of the system that had been under-invested for many years.
Mr Awortwi made the call when he, in the company of the heads of the Electricity Company of Ghana (ECG) and the Ghana Grid Company (GRIDCo), addressed the media to explain to the public the need for the adjustment in electricity tariffs.
He noted that the VRA experienced increasing difficulty procuring its monthly crude oil needs to run its thermal facilities, explaining that its monthly crude bills of between $30 million and $40 million were not being covered by the current electricity tariff of 6Gp per kilowatt (or 4 cents per kilowatt).
Although the heads of the three institutions who addressed the media refused to tell how much they were demanding as tariff increase, the PURC has confirmed that in all they are demanding a total of 437 per cent increase.
While the VRA, which generates the energy, is demanding a 115 per cent increase, the GRIDCo, which undertakes the transmission of power to the ECG, is asking for 173 per cent, with the ECG, which distributes the power to consumers, asking for a 109 per cent increase.
For his part, the Managing Director of the ECG, Mr Cephas Gakpo, said the company required an average of $180 million to meet its annual investment in order to meet the growing need for electricity in the country.
He explained that the current tariff allowed the ECG to internally generate only $30 million annually to support its capital investment projects, explaining that that would not enable it to satisfy the seven per cent energy demand growth of the country.
Mr Gakpo stated that as a result of obsolete machinery, the company incurred 12 per cent technical losses and an additional 13 per cent commercial losses (electricity theft) and appealed to Ghanaians to assist it to effect the arrest of such perpetrators.
The Chief Executive Officer of GRIDCo, Mr Charles Darku, explained that the peak power demand in Accra had grown from about 110 megawatts in 1990 to about 400 megawatts in 2009, with three lines from the Volta to Achimota continuing to serve that load.
He said the total transformer capacity of Accra was about 415 megawatts, implying that the transformer capacity of Accra had almost been exhausted.
Mr Darku said his outfit had drawn up a five-year capital investment programme to cater for the construction of transmission lines and substations, the installation of transformers and substation equipment and the provision of tools for maintenance and operations.