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Company News of Wednesday, November 28, 2018
Source: citinewsroom.com
2018-11-28
Ghana Electricity Company
The electricity company of Ghana [ECG], will continue to suffer huge losses each year, which will affect the power supply if the Public Utilities Regulatory Commission (PURC) does not implement an automatic rate adjustment formula for the ECG.
According to Theo Asante Darko, general manager in charge of business development at the Ghana Electricity Company (ECG), the country might not be able to properly resolve its energy problems if the demands of the automatic price adjustment formula were ignored.
The law obliges the PURC to protect the interests of both consumers and to provide public services by establishing standard or reasonable rates and charges for utility providers.
Ghana has seen irregular power cuts in some parts of the country in recent weeks. Some badysts have questioned the high level of debt of companies in the chain of production, transmission and distribution of electricity.
In the case of the ECG in particular, they have been blamed for much of the debt owed to electricity producers because of the huge losses that they incur because of poor collection. and of a theft of electricity.
Bad contracts and high debts are at the root of Ghana's energy problems – ACEP
The Executive Director of the African Center for Energy Policy, ACEP, Ben Boakye, explained that the current energy challenges of the country, which cause frequent power outages, are due to the high level of indebtedness of the sector.
Expressing on Citi TV's point of view, Ben Boakye said that the Ghana Electricity Company (ECG) was the most indebted agency of the sector with a debt of nearly 1 billion from Ghc in July 2018.
"We must tackle the root cause. The electricity sector uses steroids because we have not stopped creating debts. If you check the functioning of ECG for 2018, the documents I saw show that by the first quarter of 2018 they had lost nearly a billion Ghc. If they make losses, they can not pay. and if they are unable to pay, the producer will have to appeal to the one who holds the contract, namely the government, and the government will have to get money and pay. So if we do not solve this problem, we will have to use our taxes at some point to pay the producers.
Loss of GHc785m
The records show that the Ghana electricity company recorded in 2017 a net loss of 785 million GH.
Asante Darko said Tuesday at the Citi Breakfast Show that most companies in the distribution chain were buying fuel and other equipment needed to produce energy in dollars, but ECG, supposed to sell it to a price equivalent to cedis.
He added that PURC should intervene to correct this anomaly, because the current tariff regime does not help things.
"The problem is that the [power] The power generation companies buy their fuel and all the other accessories that they use to generate electricity in dollars. But the electricity rates are in Cedis. So there is an automatic adjustment formula that the PURC should do to adjust it. As long as the GEC is regulated, if there is a change in the level of production and that does not translate into the tariff, there will be a problem. "
"Let's get rid of the problem, see where it is and do not create the impression that if someone does not tell the truth or that someone is ineffective. I know, there are a number of problems in the system that can be solved, but everything is money. And if the tariff regime does not support the entire system, we will continue to operate in cycles, "added Asante Darko.
Dumsor to come back or not
Asante Darko's comment is a continuation of the recent stirrings caused by the apparent return of erratic power cuts.
Reports indicate that unpaid public debt to electricity producers is the cause of the breakdowns; a claim that some government communicators have challenged.
But Energy Minister Peter Amewu acknowledged that the current failures were causing financial and technical difficulties.
"Our main challenge has been the incomplete reverse flow project of bringing gas from west to east. We had to speed up the process bypbading the bypbad but not yet connected to the West African pipeline. This is because WAGPA has not proposed a reverse flow rate and WAPCO will not sign the toll-free Gas Transmission Agreement (GTA). WAPCO wants to pay 3.2 billion US dollars, while we want to pay 1 billion US dollars. "
However, Amewu pointed out that Ghana 's electricity supply problems and power cuts to citizens are now under control.
"The Ministry of Energy wants to badure the public that the situation is now very much under control."
Dumsor will never be back – ECG ensures
Mr. Asante Darko at the Citi breakfast lounge badured that Dumsor would not return.
"Dumsor is not back and certainly will not be, at least as long as I work with ECG," he told Citi Breakfast Show host Bernard Koku Avle.
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