The Northern Electricity Distribution Company (NEDCO) and other stakeholders in the power sector, have stated their readiness to comply with the PURC’s directive announcing tariff reduction, although their expectations were not met.
The utility regulator on Monday, March 5, 2018, announced that it has reduced electricity tariffs between 10 and 30 percent for the various categories of consumers.
The development also followed the completion of exhaustive consultations with the various stakeholders comprising utility providers, consumers and industry analysts.
Commenting on the latest directive, the Public Relations Officer of the Northern Electricity Development Company (NEDCo), Alhassan Ababa, told Citi Business News his outfit will comply albeit contrary to their expectations.
NEDCo, for instance put forward a proposal seeking about 200 percent rise in tariff, compared to the figure approved by the PURC in 2015.
Though Mr. Ababa explains that the latest move might affect their initial operational plan,they will work with it in the interim.
“We feel very strongly that if we had received what we asked for, it would have made our work very easier and enabled us serve our customers much better. But these notwithstanding, the PURC is just not considering our position by rather considering all factors that come into play in the generation and distribution of electricity and they feel that some reduction between 10 and 30 percent is what we should get now and hence they have approved that, we will work with it and see how it will go,” he stated.
He was however hopeful that the decision to maintain the energy service charges for the utility companies should cushion them for some time.
The energy service comprises charges that are imposed to facilitate the response time, resolution of complaints, among others.
“The energy production charges I want to believe comprises what goes into the production, transmission and distribution and those components the PURC considers that something could be done and that have been effected.”
PURC justifies reduction in tariffs
The Executive Secretary of the Public Utilities Regulatory Commission (PURC), Maame Dufie Ofori,justified the basis for the reduction.
Speaking on Eyewitness News, Madam Dufie Ofori attributed the decision to a decline in the key components that form the basis for the tariffs.
“Gas price has come down; at the time they were asking for proposals, the hydro allocation was only 60 percent. Now it is 65 percent which means it is a cheaper source of generation. Because of the renegotiated power purchase agreement, their capacity charges have gone down ranging between 20 to 25 percent and also their losses too have been reviewed,” she stated.