Article: Regulation For Development

REGULATION FOR DEVELOPMENT

Regulation as defined in the Collins English Dictionary as “the controlling of an activity or process usually by means of rules”, has been with man since the creation of the earth, when according to the Bible, God gave rules to Adam and Eve in the Garden of Eden. It is an activity practiced at all levels of mankind; ranging from our basic individual lives to that of management of countries. Utility regulation is a practice dating over 500 years ago, is being adopted by most countries globally.  The Public Utilities Regulatory Commission (PURC) established in October, 1997 under the Public Utilities Regulatory Commission Act, 1997 (Act 538) to ensure the provision of quality electricity, water and natural gas supply in Ghana, has been undertaking this task diligently.

In order to achieve its mandate, the PURC employs a range of strategies. Key amongst these strategies are effective performance monitoring, enactment of legislation and regulations, tariff setting and complaints handling, with the overall aim of ensuring quality service to the end user as well as financial viability of the utility service provider.

The PURC in its 22years of existence as a regulatory body, has undertaken several actions that have ensured the sustainability of the Electricity and Water distribution services.  The following decision have been undertaken and implemented by the Commission in recent times:

Refund and Compensations to Consumers

  • During the year 2018, the Commission ordered Electricity Company of Ghana (ECG) to compensate its prepayment customers in Achimota, Korle-bu, Dansoman and Kaneshie all in the Accra West district who suffered difficulties in vending power from December 03 – 12, 2017. On the basis of the number of consumers affected within the areas, a total compensation paid amounted to One Million, Nine Hundred and Twenty-seven Thousand, Six Hundred and Twenty Ghana Cedis, Forty-five pesewas (GHS 1,927,620.45). These customers were credited with some amount of electricity units as their quota for the compensation. The order was made in January, 2018 and was complied with by the ECG.

  • The Commission also issued an order for Ghana Water Company Ltd. (GWCL) to reduce tariffs by 10.08% from its March 2018 gazzetted tariffs across board for all customer categories. This was as a result of non-compliance with tariff decision and regulatory directives in relation to the Teshie Desalination Plant which led to a breach in section 11 of the Public Utilities Regulatory Commission Act 1997, (Act 538). The cost of operating the plant was included in the tariff for GWCL but was not being operated and therefore water customers were paying more than they were supposed to pay. This 10.08% reduction in GWCL tariff was to serve as forfeiture of the component of tariffs related to the operation of the Desalination plant, refund of over-recovered tariff income and compensation to GWCL customers. Base on this order, GWCL refunded a total of Fourteen Million, and Ninety-seven Thousand, One Hundred and Forty-six Ghana Cedis (GHS 14, 097,146.00) to all its customers. This amount represented five (5) months’ tariff income unfairly over-recovered by GWCL between March 15, 2018 and September 15, 2018.  Also, GWCL paid to its customers an amount totaling Five Hundred and Forty-two Thousand, Nine Hundred and Thirty-eight Ghana Cedis, Forty-eight Pesewas (GHS 542,938.48) as compensation for undue overcharges.  This order was made in September, 2018 was also subsequently complied with in February 2019.

  • In line with its operations, the Commission ordered that customers be refunded in a form of adjustments on their bills due to wrongful over billing. These adjustments amounted to a total of One Million, Six Hundred and Sixty-four Thousand and Thirty-four Ghana Cedis, Thirty-eight Pesewas (GHS 1,664,034.38) and were passed and credited within the year 2019.  The PURC has also a number of times ordered utility service providers especially ECG to compensate consumers for damaged equipment as a result of poor-quality service.

Promoting Investor Confidence

  • The PURC as a policy shift in its tariff methodology, collapsed the maximum demand charges for Special Load Tariff (SLT) customers of electricity. This would bring about some relieve in monetary terms to such customers.

  • The PURC has improved its transparency and provision of appropriate data for investors by publishing information on our Rate Setting Guidelines as well basis of our Tariff Decisions on the Commission’s website.

  • The establishment of a Formal Hearing Division which operates on as a quasi -judicial process to address complaints from Consumers and Utility Service Providers. The Formal Hearing system is designed to promote stakeholder confidence in our decisions through a more formal, transparent and formalized process.

Availability of appropriate data is very crucial to our ability to serve the economy well and therefore we entreat consumers and key stakeholders to report any service delivery deficiencies to the appropriate utility service provider and if not satisfied with the response, forward the complaint to the PURC for redress.  The Public Utilities Regulatory Commission reiterates its commitment in ensuring customer service satisfaction and also seeing to the economic viability of the utility service providers.