Adopt a graduated approach to debt recovery – Govt to PURC

The Government has urged the Public Utilities Regulatory Commission (PURC) to defer at least 35% of the next electricity tariff adjustment owing to the current economic challenges faced by Ghanaians.

Ahead of the PURC’s expected quarterly adjustment of electricity tariffs, Government Officials are reported to be impressing the regulator to be measured in its efforts to clear the outstanding debts owed to Power Producers.

Forex-related debts owed to power producers are reported to have increased by some 1.2 billion cedis as a result of the non-application of the proposed 44% increase in tariffs in the last adjustment window.

It will be recalled that though the utility providers requested a 44% increase in order to clear outstanding debts, the PURC allowed only a 29% increase.

The outstanding 15% is said to have accumulated an extra debt of some 1.2 billion cedis since then.

Major Independent Power producers are reported to be threatening to switch off their plants if Government does not pay up the arrears.

Sources within the government say while the government is keen to avoid blackouts emanating from shutdowns, it is also wary of allowing the PURC to fully impose the needed 27.9% increase in the upcoming window to clear the extra debts.

Reports say the government late Tuesday night urged on the PURC to defer part of the expected increase until such a time when economic conditions improve. Though the cost of living is gradually reducing after recent hikes, Government sources say conditions should be allowed to improve some more before the full debts are cleared.

The deferment is expected to enable the Utility providers clear parts of their debts while cushioning Ghanaians for the period.