Thursday, 11 September

Ghana's power sector faces uncertainty as VRA and ECG seek tariff hikes

General News
Evans Somuah Mensah

The Volta River Authority (VRA) has submitted a proposal to the Public Utilities Regulatory Commission (PURC) seeking a 59% increase in its Bulk Generation Charge (BGC).

If approved, the tariff would rise from 45.0892 pesewas per kilowatt-hour to 71.8862 pesewas per kilowatt-hour.

Explaining the request, Evans Somuah Mensah, Senior Economic Analyst at VRA, said the hike was necessary to fully recover power generation costs, including supply to distribution companies, transmission, and ancillary services.

He disclosed that VRA is seeking $30.49 million annually for Akosombo power generation and $30,000 for the Kpone Thermal Plant, citing under-compensation for its role in supporting the national grid.

Other utilities have also submitted tariff demands to the PURC:

Electricity Company of Ghana (ECG): 55.7671 pesewas/kWh

Northern Electricity Distribution Company (NEDCo): 92.7333 pesewas/kWh

Enclave Power Company Limited (EPCL): 147.1775 pesewas/kWh (the highest request)

Separately, ECG has proposed a 224% increase in its Distribution Service Charge (DSC1) for the 2025–2029 tariff period. The charge would jump from GHp19.0875/kWh to an average of GHp61.8028/kWh.

The company argues that the adjustment is essential to restore financial stability, citing inflation, exchange rate pressures, and rising interest costs.

According to ECG, its annual revenue requirements will average GHS 9.1 billion over the next five years, driven by higher operational costs, staff expenses, depreciation, capital recovery, and taxes.

 

If approved, the proposed hikes could significantly raise electricity tariffs for households and businesses, intensifying debate over affordability, cost recovery, and the long-term sustainability of Ghana’s power sector.

Source: Classfmonline.com/Edem Afanou