The Public Utilities Regulatory Commission (PURC) said on Wednesday it strongly disagree with some aspects of the World Bank (WB) Publication questioning the competence and tariff setting processes of the Commission.
The World Bank’s report titled "Energising Economic Growth in Ghana: Making the Power and Petroleum Sectors Rise to the Challenge" dated June 2013 was launched on Tuesday.
A statement signed by Nana Yaa Akyempim Jantuah, Director, Public Relations and External Affairs, said the WB report which said the PURC did not fully apply the Automatic Adjustment Formula but just for two very brief periods was incorrect.
It said the PURC as the body mandated to set tariffs for electricity and water has also the prerogative to approve or refuse tariffs adjustments depending on the situation and context.
The statement noted that the Automatic Adjustment Formula was applied on all occasions since the re- introduction of the Tariff Adjustment Mechanism.
“The fact that whatever tariff decision was arrived at was not passed on to consumers for reasons of non compliance to quality of service benchmarks on the part of providers does not mean that this tariff mechanism was not applied fully or adhered to,” the statement said.
The statement said it was untrue that the Commission has capacity constraints and it is unable to retain staff it trains at considerable expense.
“At top management level the Commission quickly replaced retiring staff with competent replacements. Additionally, the Commission has strengthened the Energy Directorate with a new Director and made adjustments within its management to improve efficiency. There has been no major net loss at the Commission,” the statement added.
The PURC it said has retained and recruited more staff with industry experience and expertise, who are confident and knowledgeable with high assertiveness to meet the expectations of both the Public Utilities and Consumers of Water and Electricity.
“Neglecting the needs of the consumer is going to be suicidal and that is exactly what the World Bank wants the PURC to do. The World Bank cannot be suggesting to Ghanaians that the utilities should continue to ignore the benchmarks set in Ghana law with impunity and without any consequences whatsoever,” the statement added.
The PURC wishes to place on record that investors in the industry sign their own bilateral Power Purchase Agreements with bulk customers and public utilities and their tariffs are not moderated by the PURC if they are not going to sell to the regulated market.
“The World Bank should know that the reason why an investor is going to be unhappy and lose confidence is not only the tariff but largely due to the uncertainty surrounding the availability of the source of fuel such as natural gas and payment of bills to them,” it said.
The Bank should also reckon that the tariffs for investors are much higher than the weighted average bulk generation tariff that the PURC approves for the regulated electricity market.
It said “the insufficient regulatory transparency as indicated by the World Bank is totally false, saying, the Electricity Rate Setting Guidelines is a public document which has also been given to the utility Service providers and published on our website.”
The details of tariff setting, including the Automatic Adjustment Formula, were all published in the state's gazette for the information of all stakeholders, including the World Bank.
The PURC Tariff Setting Process is not in the Dark as alleged by the Bank. However, it is always consultative and transparent, taking into account the interest of all stakeholders as required by law.
The statement said the Commission is totally at a loss what the World Bank means by unbalanced membership of the PURC. The Commission is very balanced and the composition is stipulated in Act 538 (1997), the Act that established the PURC.
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