Effective May 3, 2025, consumers of both electricity and water would experience an increase in tariffs to ensure a regular supply of service.

This follows a new tariff approval by the Public Utilities Regulatory Commission (PURC), which will see electricity increased by 14.75 per cent and water by 4.02 per cent across the board for all customers.

The tariff for which approval was granted at 6 p.m. last Friday, April 11, 2025, was occasioned by changes in the exchange rate, domestic inflation rate, cost of natural gas and electricity generation mix, among others.

Rationale

A statement which was signed by the new Executive Secretary of PURC, Dr Shafic Suleman, explained that a total payment of the outstanding revenues from the previous quarters had resulted in a much higher increase in both electricity and water tariffs.

However, he said the commission, being mindful of the current economic situation of citizens, decided to recoup only half of the outstanding debts.

The commission, Dr Suleman said, had to minimise the impact of tariff increases on livelihoods while ensuring that the utilities were well-capitalised to keep the lights on.

Processes

The PURC has concluded the regulatory process for the quarterly adjustment of electricity and water tariffs for the first and second quarters of 2025.

The regulatory process was in line with the commission’s Quarterly Tariff Review Mechanism outlined in its Rate Setting Guidelines for quarterly adjustment of natural gas, electricity and water tariffs.

The quarterly tariff adjustment tracks and incorporates changes in four key variables, namely the cedi dollar exchange rate, inflation, electricity generation mix, and cost of fuel (mainly natural gas), in electricity tariffs.

Mechanism

The mechanism was essentially meant to avoid over- and under-recovery of revenues.

Under-recovery has negative implications for the ability of the companies to supply electricity and water to consumers, and it has the potential to cause outages of both electricity and water supply.

Over-recovery unnecessarily overburdens consumers of electricity and water.

This process, therefore, enables the commission to maintain the real value of the tariffs over an adjustment period.

For the second quarter of 2025, a Weighted Average Exchange Rate of GH¢15.6974 to the US dollar was used for computation of the tariffs.

This implied an under recovery of GH¢1700 from the last quarter review in 2024.

The commission used an average three-month projected inflation rate of 22.49 per cent for the second quarter of 2025.

The applicable Weighted Average Cost of Gas (WACoG) for the second quarter of 2025 was USD7.6289/MMBtu.

This figure dropped from USD 7.8368/MMBtu, which was applied in the third quarter of 2024.

The projected hydro-thermal generation mix for the quarter under review is 28.80 per cent for hydro and 71.20 per cent for thermal.

A key variable that contributed significantly to the 2025 quarterly tariff adjustment was an inevitable attempt to pay half (50 per cent) of an outstanding revenue of Gh¢976 million carried over from the previous three quarters of 2024.

The remaining 50 per cent will be spread over the subsequent quarters of the year.