The Electricity Company of Ghana (ECG) has submitted a proposal to the Public Utilities Regulatory Commission (PURC) for a steep 225% increase in its Distribution Service Charge (DSC1).
ECG Proposes Major Tariff Increase to Prevent Financial Collapse
The Electricity Company of Ghana (ECG) has proposed a significant increase in tariffs, warning that the move is essential to avoid financial collapse and to maintain a stable and reliable power supply.
Under the proposal, the DSC1 charge would rise from GHp19.0384/kWh to GHp61.8028/kWh for the period 2025–2029.
Serving more than 73% of Ghana’s population and 4.87 million customers, ECG says the current tariff levels are no longer sustainable. The company argues that DSC1 currently covers just 11% of the total electricity value chain cost—well below the global benchmark of 30–33%.
Additionally, ECG cites the 74% depreciation of the Ghana cedi between 2022 and 2024, which has eroded the real value of its revenues by 45%.
To counter these challenges and address the public’s persistent complaints about service quality, ECG has presented a detailed plan to invest the new revenue in critical infrastructure.
ECG Outlines Planned Improvements Backed by Tariff Proposal
The Electricity Company of Ghana (ECG) has disclosed that it has already invested US$408 million since 2022 in key infrastructure upgrades, including new substations, system automation, and the deployment of over one million smart meters.
The proposed tariff adjustment is intended to fund the continuation and expansion of these initiatives, with the goal of delivering measurable improvements in service quality.
According to ECG’s projections, the new tariff will help significantly reduce power outages. The System Average Interruption Duration Index (SAIDI) is expected to fall from 32.5 hours in 2024 to 19.2 hours by 2029, while the System Average Interruption Frequency Index (SAIFI) is projected to drop from 16 to 9.
In addition, ECG anticipates a reduction in system losses from 27% to 22%, alongside an improvement in revenue collection efficiency from 87% to over 90% over the same period.
ECG’s proposal addresses customer concerns about accountability and fairness.
It plans to roll out about 3 million smart meters to ensure accurate billing and prevent theft.
The company has also assured customers that faulty meters will be replaced at no additional cost and that investments will lead to faster complaint resolution and improved voltage supply.
The utility is also promoting its digital payment platform, the ECG Power App, which allows customers to buy credit, check balances, and lodge complaints without visiting a physical office.
The company emphasised that a cost-reflective tariff is essential to free ECG from its dependence on government bailouts, allowing those funds to be redirected to other national priorities.
The final decision on the proposed tariff rests with the PURC, which is mandated to review proposals and hold public consultations before any new rates are implemented.
Any changes will only take effect after PURC’s approval and a public announcement.
