Power Producers Propose 30% Power Tariff Increment

Kwame Pianim

THE CHAIRMAN of the Chambers of the Independent Power Producers, Distributors and Bulk Consumers (CIPDIB), Kwame Pianim, has proposed a 30 per cent electricity tariff increment in order to help clear the legacy debt in the energy sector which is estimated at $2.5 billion.

Aside from the proposed increment in tariffs, he advocated the full
adoption of a cost recovery method of setting tariffs in order to ensure that
consumers got value for money while investors attained a fair risk adjusted
rate on returns.

He explained that the key element to stabilise the energy sector was
to ensure that the sector players regained and maintained sound balance sheet in
order to have long term market-driven plans to respond effectively to demand.

“This situation will minimise commercial interest driven take-or-pay
excess energy generation capacity and take-or-pay liquefied natural gas (LNG)
excesses,” he said.

Mr Pianim was speaking at the launch of the CIPDIB where he said concession
arrangements with major distribution institutions had led to various improvements
with the exception of quality of service.

He attributed the situation to the inability of sector players to
maintain plants and equipment due to inadequate inflows of revenue as a result
of political interference in tackling issues of energy tariffs and structural
imbalance in government revenue and expenditure.

“I am convinced that if energy sector key players have strong
balance sheets, their management and boards will focus on their core business
of delivering quality service,” he said.

The aim of CIPDIB is to, among other things, create a platform for
advocacy, influence legislations and policies, coordinate activities of members
and also serve as an incubator for innovation and ideas.

The theme for the launch was: “Promoting Sustainable Energy Sector Planning and Quality Service for Socio-economic Development of Ghana”.

The key sector players within the energy sector comprise the Electricity Company of Ghana (ECG) – responsible for the distribution of power, Ghana Grid Company (GRIDCo) – for transmission of electricity and the Volta River Authority (VRA) – for power generation and Independent Power Producers (IPPs) who sell power to the VRA.

By Issah Mohammed