Posted on: www.dailyguideghana.com
By William Yaw Owusu
Friday March 09, 2018
The opposition National Democratic Congress (NDC) is fighting against the recent reductions in electricity tariffs by the New Patriotic Party (NPP) government.
Some NDC Members of Parliament (MPs) have argued that the measures put in place by the Public Utilities Regulatory Commission (PURC) to bring down electricity tariffs, effective March 15, are counter-productive and will bring back erratic power supply, known in local parlance as dumsor - which reigned supreme when the NDC was in office.
Energy Minister, Boakye Agyarko, has denied that the tariff cut will bring back dumsor, saying dumsor is gone with NDC.
NDC believes that the electricity tariff reduction was political because the NPP had promised to reduce tariff of power when elected.
Strangely the same NDC had accused the NPP of not fulfilling its campaign promise of reducing tariff and other promises.
One of those opposed to the tariff cuts is Edward Bawa, NDC MP for Bongo in the Upper East Region, who worked at the Ministry of Energy as a communication specialist.
He said after the PURC’s announcement, he feared the reduction in tariffs was going to bring about power crisis because it was going to compromise the revenue projections of the utility providers and power generators and expose them to debts.
“If you look at the challenges that brought us into dumsor, apart from the capacity and fuel security, it also had to do with the financial health of the utilities,” Bawa, who is a ranking member of the Mines and Energy Committee of Parliament, said on Citi FM.
“The current move, the reduction is on the energy charges, it is an encroachment on their revenues because energy charges are one of the accruals that the utilities will make,” he noted.
He insisted that the NPP government is risking the energy security of the country in the name of promises it made during the 2016 electioneering campaign.
“I know the factors that took us to dumsor. Those factors are still lingering. My fear is that if we don’t consolidate and make this system robust, and just because of the fact that we want to satisfy electoral promises, we go into situations like this, we may expose ourselves to yet another dumsor,” Mr. Bawa posited.
Taxes & Levies
He proposed that President Akufo-Addo’s government should be “focusing on the burden it puts on the tariffs in terms of taxes and levies. For example, you have a VAT of 17.5 percent on it. In all these arrangements, the take that goes to the state and the take to the government have not been touched.”
According to the MP, “Industry will expand; they will make profits; you tax those profits. They expand; they employ people and you still tax incomes. This is how you will get it (revenue). It is an indirect road but you will eventually get the money. That is the proposal I am making,” the MP said.
The PURC announced a general reduction in electricity tariffs and in the announcement, residential customers will enjoy 17.5% reduction, while non-residential customers will see tariffs cut by 30%.
Those in the mining sector were given a 10% tariff cut, and 25% cut for Special Load Tariff Customers (LV, MV & HV).
Ahead of the PURC announcement, the NDC had lambasted President Akufo-Addo for announcing some average power tariff cuts of 14% in January, claiming the president was usurping the powers of the independent regulator (PURC).
In January, Energy Minister Boakye Agyarko exposed the minority spokesperson on energy, Adams Mutawakilu, who had claimed that the ministry did not make any proposal to the PURC to be factored into the calculation that led to the reduction of tariffs as captured in the 2018 budget.
“The ministry sent a proposal to the PURC on the 17th of November, and he is welcome to see copies of these matters.
Indeed, it is within his power as the ranking member to summon me to the Mines and Energy Committee (of Parliament) for such a verification,” the minister rebutted, adding, “We have submitted our proposal and I can say that without fear of contradiction, because I know that is what the truth is.”
The NDC has always been cynical about the government’s plans to reduce electricity tariffs in the budget.
In November last year, they rejected moves by the Akufo-Addo administration to reduce the cost of electricity when the budget was read by Finance Minister, Ken Ofori-Atta.
Adam Mutawakilu, NDC MP for Damongo in the Northern Region, had told Joy FM that the government had no power to reduce the cost of power.
Majority Leader Haruna Iddrisu was also skeptical about the government’s ability to cut energy tariffs.
He had said ‘Hallelluya! after the budget had been read and the proposed reduction was made.
He had said sarcastically, “We look forward to the proposed reduction.”
Bizarrely, the NDC is the same political grouping whose members are on the neck of the government to reduce the economic burden of Ghanaians.
Recently, the Energy Minister revealed how NDC appointees during the Mahama administration padded the cost of power purchasing deals, forcing electricity tariffs to skyrocket and the NPP government had to re-negotiate with the power producers to bring the cost of producing power down, thereby enabling the government to make proposals to the PURC to cut down tariffs.
The NDC, although claiming to be a social democratic party, has been against every pro-poor policy and social intervention that has been introduced by the NPP government and its hatred for the Free Senior High School initiative is a classic case.
DAILY GUIDE learnt that the NDC would soon come out with a robust response to the tariff cuts and it is going to be in defence of the power producers as against the public.