Energy Analyst Slams ECG Over 224% Tariff Hike Proposal

An energy analyst, Kwesi Yamoah Abaidoo, has strongly criticized the Electricity Company of Ghana (ECG) over its proposal to increase electricity distribution charges by 224%. The ECG is seeking to raise the Distribution Service Charge (DSC1) from the current GHp19.0875/kWh to an average of GHp61.8028/kWh. The company cites several factors for the hike. These include inflation, foreign exchange volatility, interest rates, and investment cost recovery. The company insists the adjustment is necessary to restore financial viability and sustain operations.

However, speaking with Umaru Sanda Amadu on Eyewitness News, Abaidoo argued that the ECG has failed to tackle its own inefficiencies. He mentioned technical and commercial losses, poor governance, and wastage. These problems, he said, continue to drain the company’s resources. “Requesting such an increment will yield no results until these inefficiencies are addressed,” he stated. “ECG seems to take pleasure in increasing the burden of Ghanaians instead of fixing its structural problems.”

While acknowledging recent improvements in power stability, the analyst insisted that repeated tariff hikes were unfair to ordinary citizens. He recalled that the Public Utilities Regulatory Commission (PURC) only approved a 14.75% tariff increase in July. Nevertheless, the company now asks consumers to brace for another sharp adjustment. Abaidoo also noted that the company did not pass on gains from recent currency appreciation to consumers. Such gains should have cushioned consumers through reduced tariffs.

“The average Ghanaian hasn’t seen any increase in disposable income. Salaries remain stagnant, yet electricity costs keep rising,” he warned. “This proposal risks pushing low-income households, especially those in rural areas, off the national grid.” He further cautioned that such steep hikes would also hurt businesses. These businesses would pass costs onto consumers, thereby worsening economic hardships.

While Abaidoo acknowledged that some level of increase may be inevitable, he argued that a gradual adjustment would be more reasonable. He suggested an adjustment of not more than 50% over four years. “For a rational percentage, we believe that anything within the range of 50% for the next four years would be reasonable,” he explained. The company has submitted its proposal for the ECG tariff hike proposal to the PURC for consideration as part of the 2025–2029 tariff review process.

Source: CitiNewsroom