ECG seeks 225% tariff hike to recover investments, improve power supply

The Electricity Company of Ghana (ECG) has proposed a major tariff adjustment that could see its share of the end-user electricity tariff rise by 225% over the next regulatory period.

In its proposal to the Public Utilities Regulatory Commission (PURC), ECG is asking for an increase in the Distribution Service Charge (DSC1) from GHp19.0384 per kilowatt-hour (kWh) to an average of GHp61.8028/kWh between 2025 and 2029.

The company argues that the upward adjustment is necessary to recover the cost of capital investments made in recent years to expand network capacity, improve reliability, and reduce losses. “A full cost recovery tariff… would support ECG’s short- and long-term investment planning and ensure steady infrastructure development to sustain the distribution network and provide reliable and quality power supply at all times,” the utility said.

ECG estimates its annual revenue requirement during the tariff period at GH¢9.5 billion, with operations and maintenance accounting for 35% of costs, human resources at 18%, and depreciation and return on assets at about 39%. Capital recovery payments for critical short-term projects represent just over 7%.

The utility also highlighted the impact of macroeconomic challenges, noting that the depreciation of the cedi has eroded its revenue base. “In the last three years…the Annual Revenue Requirement in dollar terms has decreased in value by 45.43%,” ECG explained.

To strengthen its financial position, ECG is recommending reforms including collapsing residential tariff bands, adopting the Bank of Ghana exchange rate in tariff setting, and introducing a dedicated public lighting tariff.

The company also pledged service improvements if the proposal is approved. By 2029, ECG expects to cut system losses from 27% to 22%, reduce outage durations by 40%, and improve collection efficiency to 98%. It also plans to roll out three million smart meters and expand preventive maintenance programs.

“The approval of this proposal would support the execution of critical projects and interventions aimed at enhancing service delivery to customers,” ECG stressed.