The demands of regulated electricity firms for rate rises, according to policy analyst Bright Simons, are unsustainable.
According to him, the utility corporations are "laughing" at the cost of Ghanaians with their demands, and he has called on the Public Utilities Regulatory Commission (PURC) to review the sustainability of their integrated resource plans.
"They can't explain their demands," he continued, "and we feel the PURC has every reason to commence active regulation."
"This propensity where it just sits there and asks quality KPI data rather than exploring the utilities' integrated resource plan to see whether the return on equity analysis that they're doing is correct."
On JoyNews' Newsfile on Saturday, he made these remarks in response to the regulated energy firms' proposal to the PURC to raise rates by more than 100%.
Utility businesses claim that their present rates are insufficient to properly sustain their operations, adding to operational inefficiencies.
Stanley Martey, the Ghana Water Company Limited's communications director, warned earlier this week that if prices stay low, the GWCL may be compelled to close down.
William Boateng, the Communications Manager of the Electricity Company of Ghana, declared that the ECG is broke and that charges must be raised as soon as feasible. However, in response to their remarks, Bright Simons pointed out that, in the instance of ECG, the percentage of tariffs now paid to them is far larger than the amount received by other regulated utility companies across the world.
If ECG complains about low tariffs, he believes it is because to improper tariff utilization rather than the rates themselves being too low.
"So we simply have to look at the data," he stated. ECG, for example, charges a portion of the end-user rate for distribution services. So what you pay in the end is an aggregated figure derived from charging you for electricity generation.
"So Akosombo is owned by VRA, and they have a certain cost for producing electricity; GRIDCo is owned by the government, and they transport the power to ECG; ECG is more or less owned by the government, and they distribute the power to your house as distributors."
"And each of them takes a percentage of the money you pay." So, just looking at ECG, they're receiving around two and a half cents every kilowatt hour that they provide you. Two and a half cents is a great price. In many regions of the world, such as Asia and the United States, utilities of the same scale as ECG are surviving on one cent or 1.5 cents.