After what seemed like life in the never-ending hole of Dumsor, Ghana’s Public Utilities Regulatory Commission (PURC) approved new Electricity Company of Ghana (ECG) tariffs (i.e. prices that will be paid by the consumer for power used) on 14th December, 2015, ending the year on an unhappy note for many.
We share some of the most asked questions and answers as provided by Watt Ghana, a Ministry of Ghana project.
1. BY HOW MUCH HAS ELECTRICITY TARIFFS GONE UP AND HOW DO I CALCULATE THE TARIFF?
The approved tariffs was an increase of 59.2% across the various consumption brackets. The tariffs for those who consume 0-50 units (lifeline bracket) per month was calculated from 21p to 34p; tariffs for 51-300 units was increased from 42p to 67p; tariffs for 301-600 units increased from 55p to 87p and those above 601+ units increased from 61p to 97p.
On the 27th January 2016, the Government and Organised labour signed a memorandum of understanding that resulted in a 45% reduction to the approved lifeline rate of 0-50 kWh and a 50% reduction in the approved lifeline rate of 51-300kWh
2. WHY ARE OUR ELECTRICITY CREDITS RUNNING OUT? ARE WE BEING SHORTCHANGED?
You are not being shortchanged. The initial credit ‘disappearance’ was because ECG’s billing system is a monthly cyclical system.
Therefore, the meters deducted credit to cover a month’s billing cycle, starting December 01, 2015 instead of December 14, 2015, when the new tariffs took effect.
About 500,000 customers are on prepaid meters of which 300,000 of these were affected. Over 280,000 of them have been reimbursed. Customers who were overcharged because of the billing cycle will receive a refund at their next vending. ECG has taken steps to prevent this from happening again.
3. HOW DO I VERIFY THAT I HAVE RECEIVED MY REFUND?
When you get a refund, it will appear on the receipt you receive after buying your credit. In some cases, it is directly credited to your meter. Kindly check your receipt when you buy power and check your meter for confirmation.
4. WHY ARE MY UNITS RUNNING OUT SO QUICKLY?
Now that the lights stay on longer, you are probably using electricity for more appliances and also for a longer period. The more power you use, the higher the tariff bracket you fall into. If you use less than 50 units a month, you pay the least tariff of about 34p per unit. If you use less than 301 units, your tariff is about 67p per unit. For those who fall within the 301 to 601-unit bracket, your tariff is about 87p. Those above 601 pay 97p per unit.
5. DOES THAT MEAN I SHOULD BUY A SMALLER AMOUNT OF UNITS AT A TIME IF I AM USING PREPAID SO THAT I WILL FALL INTO THE LOWER TARIFF BRACKET?
NO! Your electricity consumption is billed on a monthly basis; starting with the first day of each month when the meter resets itself to start a new billing cycle. Therefore it does not matter when you top up or by how much you top up.
6. IF I AM USING PREPAID, DOES THE METER DEDUCT ONLY AFTER THE BILLING CYCLE?
Deductions are made in real time as you consume the power. If your units run out and you recharge, charging for use will continue from where you left off
7. BUT IF I USE PREPAID CARDS, AM I STILL ON A BILLING CYCLE? THE UNITS ON MY PREPAID CARD ARE JUST GALLOPING.
Yes, prepaid meters are metered in the same manner as credit meters, with the units you consume graduating from the lifeline bracket to the other brackets as explained in Question 1.
Your units are ‘galloping’ because you are using power constantly. Compared to when you used to have power on for 12 hours and 24hours off, these days you have power continuously. So if you used to pay 1 cedi during the 12 on/24 off, you are now using power 12on/24 on. Therefore you are also paying for the 24 extra hours you are enjoying the power, which is an extra 2 cedis – taking your costs to about 3 cedis.
8. WHAT GOES INTO THE ELECTRICITY BILL I PAY? WHY DO I SEEM TO BE PAYING MORE THAN THE ANNOUNCED INCREASE IN TARIFFS?
The bills you may have these components.
a. The actual cost of the unit(s) of power consumed, according to the tariffs above.
b. A 5% levy on energy consumed for street lighting.
c. A 5% levy on energy consumed for national electrification.
d. A service charge by the utility company.
9. WHY MUST I PAY THE LEVIES?
Paying the street lighting levy enables the government to fix and maintain more streetlights to aid visibility at night. Improved visibility prevents accidents and reduces crime, among others. We must all contribute to making our nation accident-free and crime-free.
The electrification levy is used to pay Ghana’s contribution to the National Electrification Programme which is funded mainly by donor support.
It is necessary to enable the nation to expand access to electricity to all the corners of the Country. Presently Ghana’s rural and urban electricity coverage stands at 76%, second only to South Africa in Sub-Saharan Africa.
10. WHAT ACCOUNTS FOR THE INCREASED COST OF ELECTRICITY PER KILOWATT IN GHANA?
The recent tariff increases are necessary because the cost of producing electricity has gone up. In 2013, Ghana’s power mix was 58% hydro and 42% thermal. Now, it is 27% hydro and 73% thermal. It is more expensive to produce thermal power than hydropower.
Hydropower is the power that is produced using water. Thermal power is the power that is produced using gas, crude oil and other fuels. The energy demand of Ghana has been rising sharply over the years. The inability of our hydro plants to power the nation meant that more thermal plants had to be procured to keep Ghana going in terms of power supply.
11. WHY IS THERMAL POWER EXPENSIVE?
Thermal power is expensive because the fuel used to generate the power is expensive. Unlike Akosombo, Kpong and Bui- the three hydro plants, which use water, the fuels for the thermal plants are gas, light crude oil, distillate fuel oil, heavy fuel oil etc. Even though crude oil prices are going down, thermal fuel is still more expensive than water, which is free once trapped behind a dam.
12. IS THIS WHY THE TARIFFS HAVE INCREASED?
We have had to add new equipment to generate thermal power to ensure that we have the reserve or extra power in case of emergencies. We have also had to make up for the inability of the dams to produce power at their maximum capacities. For example, the Akosombo Dam is only producing 500MW even though its rated capacity is more than 1000 MW.
13. WHAT CAN I DO TO GET THE BEST VALUE FOR MY ELECTRICITY?
Please use power judiciously. When you are not using appliances, please switch them off at the socket to prevent power wastage. Do a power audit of your home or office and change bulbs and appliances that consume too much electricity. Be conservation conscious with these power-saving tips:
-don’t boil a full kettle of water to make a cup of tea.
-don’t switch on a fridge which contains only a few bottles of water.
-don’t leave on air-conditioners in a room when you are not there.
14. WE CANNOT AFFORD THE NEW TARIFFS SO WHAT IS OUR ALTERNATIVE?
Even with the new tariffs, one unit of electricity is cheaper than one candlestick. Yet it will light more than 10 bulbs, run your television, power your refrigerator, home theatre and two fans all for one hour. By way of comparison, the cost of a unit of electricity will only allow you to talk for 7 minutes on your mobile phone.