Gov’t ‘Subsidizes’ Power Tariffs

Government appears to be playing some pranks with customers of the Electricity Company of Ghana (ECG) owing to the introduction of what has been described as subsidies to cushion them over a period of six months effective July 1, this year.

This comes four months to the November 7 polls.

The reliefs, which government has offered to absorb, would cost some GH¢50 million every month bringing to GH¢303 million the total amount to be borne by government by the end of the six-month period.

At the beginning of this year, electricity customers were slapped with some new tariffs by the Public Utilities Regulatory Commission (PURC), which asked power users to pay GH67p per unit of power consumed.

Now the rate has been slashed to GH34p, the ECG said.

Analysts have described the move as one of the usual gimmicks by government which is indebted to ECG to the tune of over GH¢1 billion.

ECG also owes VRA in excess of $189 million (GH¢700 million) while VRA owes N-Gas about $1.3 billion.

The ECG, at a press conference in Accra yesterday, said the subsidies were introduced after extensive consultation with all stakeholders of the power sector, adding “the reliefs have been applied to extend the lifeline to all residential customers instead of the previous application to only customers with consumption between zero to fifty (0-50) within a month.”
In the case of non-residential and industrial customers, ECG said some subsidies have also been applied to the energy charges to reduce the total bill for such customers.

“Subsequently, a new reckoner which calculates the customer’s total bill has been put on the ECG corporate website (www.ecggh.com) to inform and guide our customers on the application of the new reliefs.”

Dr. Charles Wereko Brobbey, a former Chief Executive Officer (CEO) of VRA, has rejected government claims that it has introduced subsidies to cushion low-level consumers of electricity.

In an interview with Accra-based Citi Fm, he said, “It is not true. You are being charged VAT, energy levies, street light, among others, and those have gone up from almost 1 to about 5 percent…when you say you are subsidizing something, it means you are charging below how much it costs. But here is the case that you (government) are giving with the left hand, yet you are taking with the right… It should be taken with a pinch of salt.”

Dr. Wereko Brobbey also criticized government over its failure to effectively implement the lifeline tariff system that was meant to cushion some low-level consumers of electricity.

“I introduced lifeline tariffs. What they tried to do was to be too smart. Instead of everybody enjoying the lifeline, it was abolished for anybody who used light for more than 50 units but then even those whom it was intended for, there was no way their consumption levels could have been below.”

By Samuel Boadi