In 1999, the Public Utilities Regulatory Commission adopted a tiered residential rate structure that had unintended consequences, especially for pre-paid customers.
Recognising the growing complexity of the tariff, ECG has realigned the tariff to a simpler one and provides residential customers, who consume above the lifeline, rate some long-overdue relief from high bills. It also brings some huge relief to prepaid customers who consumed above the lifeline threshold because of the complexity of billing.
Changes in the tariff take effect from July 1, 2016. Mr Ebenezer Baiden, Electricity Company of Ghana’s General Manager for Regulatory and Governmental Affairs, explains what changes are expected for residential customers from July 2016 and beyond.
DMT: What is the main difference between the old tariff and the new tariff?
GM/RAGA: ECG customers especially prepaid customers prior to realignment of the tariff had a lot of issues with the billing system. We looked into the matter and we realised that prepaid customers who moved from 50 units to 51units had a huge difference to pay(23gh cedis) because of the way prepaid meters are programmed with the tariff classes(It took retrospective effect). There was the need to look at how to normalise that for our customers to bring some consisitencies in prepaid and postpaid billing. After the realignment, the difference that prepaid customers who move from 50units band to 51 units band have to pay now is 5cedis. That is a significant thing we have done, and the customer realises some consistencies in there and that is what we did to bring relief to our customers.
DMT: What is the timeline for implementing the new tariff?
GM/RAGA: It came into effect July 1, 2016
DMT: What is the impact to residential customers of changing the tariff structure with the new structure?
GM/RAGA: That will be evident in the new reckoner, (Click here to download http://www.ecggh.com/index.php/customer-care/services/tariff.html) if you take a look at the new reckoner and the prices, what customers end up paying in a month for the same units of electricity consumed has reduced.
DMT: Under the new realignment, will high usage customers be enjoying the lifeline rate? If yes why are wealthy customers enjoying lifeline rate?
GM/RAGA: Yes high usage customers will be enjoying the lifeline rate. There are wealthy customers who are large users, just as there are wealthy low-usage customers. The tariffs are now progressive therefore, the first 50units are prices at 33.55Ghp per kWh, 51-300units at 67.32Ghp, 300- 600 at 87.37Ghp. This means people who use more still pay more. (Download the tariff rates here http://www.ecggh.com/images/Site/2015_major__tariff_review.pdf)
DMT: What about lifeline(low-income) customers? What happens to them after July 2016 and beyond?
GM/RAGA: Life line customers will continue to enjoy the life line tariff rate so long as they remain in the bracket. Customers who were consuming beyond the 50 unit were the ones who were affected by the complexity of the old tariff. Lifeline customers were not affected.
DMT: Some are saying the new rate structure takes away incentives for conservation. Is that true?
GM/RAGA: That is not true. The progressive rates in tariffs still exist.
DMT: How would prepaid customers realise this new changes in tariff? Will their meters be reprogrammed?
GM/RAGA: At the end of the month how they spend on their bill before June and after July would have changed. There wouldn’t be the need to reprogramme because that has been done remotely by ECG.
DMT: The changes you mention are for residential rates. Will these changes impact business, commercial or industrial customers?
GM/RAGA: Yes it also has an impact onthe commercial customers. They also see some form of reduction in their bills