PURC engages utility companies on Automatic Adjustment Formula

The Public Utility Regulatory Commission (PURC) on Friday held a meeting with utility companies to introduce them to the Commission’s refined Automatic Adjustment Formula (AAF).

The PURC is seeking to re-introduce the AAF to address any adverse movement of external factors that affect tariffs.

The workshop, attended by representatives of Electricity Company of Ghana, Ghana Grid Company, Ghana Water Company and the Volta River Authority, aims at enhancing stakeholders understanding of elements of the formula and receive feedback in order to make it more robust.

It would also ensure a transparent process leading to the re-introduction of the formula for periodic adjustments.

Mr Stephen Adu, Executive Secretary of PURC, said the mechanism allowed tariffs to be adjusted periodically taking into account the foreign exchange rate and other factors.

He said the formula was being reviewed by the commission to take into account the current trend of crude oil prices on the international market, the cost of generating and producing electricity and water, among other things.

The mechanism was used in the country during 2002 and 2006, but was discontinued even though it proved useful.

Mr Adu said the AAF would reduce the financial burden on consumers associated with one-time tariff adjustments whilst ensuring the financial viability of the utilities.

It will also enable companies to plan as cost associated with utilities become more predictable.

Mr Adu said PURC would undertake a nationwide education programme on the formula to enhance public appreciation before its introduction.

Source: GNA