Utility companies, including the Electricity Company of Ghana (ECG), the Northern Electricity Distribution Company (NedCo), and the Ghana Water Company Limited (GWCL), have made proposals asking that service charges be increased by more than 200%.
The ECG recently submitted a proposal to the Public Utilities Regulatory Commission (PURC) for a 225% increase in distribution charges that would triple electricity costs for millions of consumers.
In the proposal, ECG wants the Commission to approve raising its Distribution Service Charge from GHp19.0384 to GHp61.8028 per kilowatt-hour for the 2025-2029 period. This is against the 1.69 cedis per kilowatt-hour currently paid by households and 1.53 cedis for industrial users. The proposal affects all consumer categories across residential, commercial, and industrial sectors.
ECG justified its request by citing a 74% depreciation of the cedi against major currencies between 2022 and 2024. It added that its current tariff covers only 11% of total electricity value chain costs, making operations unsustainable without significant rate adjustments.
This proposal, if approved, comes months after the PURC approved a 2.45% electricity tariff increase in July.
Like ECG, NEDCo has also submitted a proposal, requesting a 171% hike in tariffs to enable it to cut losses. NEDCo had proposed a tariff of 153.03 pesewas per kilowatt-hour for 2025, compared to the current 56.474 pesewas.
“We’re proposing an increase of 171%. We expect that the new tariff that we’re proposing will have an impact on our performance, our collection rate will increase, and distribution losses will improve from 31% to 21%,” Hashim Iddrisu, NEDCo’s Director in Charge of Commercial Operations, said at a public hearing in Accra on Tuesday.
The Ghana Water Company Limited also joined calls for tariff increase, and in its case, cited the overburdening effects of illegal mining (galamsey) on its operations.
At the stakeholder engagement with the PURC, the company presented a proposal for a 280% increase in tariffs, the highest request so far among the utility providers.
“We have the almighty pollution of water by galamseyers. And of course there are other pollutions, but the one that is really raising its head is galamsey activities. That is really causing us problems. As we speak, one of our plants is shut down because of that. We have other plants which are on the verge of shutting down,” Michael Klutse, GWCL’s Chief Manager of Corporate Planning said on Accra-based Joy FM.
The GWCL has had cause to complain about the effects of galamsey on its operations. Last year, for instance, the company issued a statement, blaming galamsey activities for water supply challenges in Cape Coast, Elmina, and surrounding communities.
Are the tariff proposals justified?
A number of analysts have criticised the proposals for the increase.
For instance, Vice President of IMANI Africa, Selorm Branttie, who spoke on Joy Fm’s morning show, said that the Ghana Water Company Limited (GWCL) may have valid reasons for the increment.
But he disagrees with that of the ECG. “When it comes to the electricity, I think that we are all paying the brunt for mismanagement or some sort of lack of cohesive policy around how we have been handling the collection side of electricity,” he said.