Power tariff not enough to guarantee stable power

The current margin of increase in utility prices may not be enough to bring an end to the current power crises facing the country, according to Joy Business sources at the power sector. The PURC earlier this week approved almost 60 percent hike for electricity, while water went up by 67 percent. Even though some of the power producers admit some consumers might have challenges in paying for any sharp increase in utility tariffs, they argue that someone has to pay for the full cost of generating power. They maintain that the almost 60 percent approved for electricity, for instance, will pay for half the actual cost of producing power. This should mean that some units of generating plants in the country could be shut down because they do not have enough money to purchase fuel and even carry out maintenance works on their plants. Some players in the power sector have also said that the current problem facing the sector is not a distribution challenge, but that there is not money to run their operations. One of them said “our accounts are in the red”. it is believe that some the producers including the Volta River Authority (VRA) are having serious challenges in securing fresh credit from the commercial banks because of their current financial position. Sources say the VRA is currently having some GHC1.3 billion debt sitting on their books, GHC800 million is owed by government while the remaining GHC500 million are interest on the loans taken. For some of these engineers has long as the funding challenges facing the sector are not address, the power crises will not end anytime soon.

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