With barely two weeks to the end of June, time is running out against the Public Utilities Regulatory Commission’s (PURC) decision to announce new utility tariffs for consumers and service providers before end of this month.
While the Commission earlier in May, hinted that it would in the first week of June announce new tariffs which will take effect from July 1, 2019, it is yet to show any traces of such an impending announcement in the coming days before end of this month, which is barely 10 days away. Already, some industrial consumers are fretting that yet another postponement is on the cards.
The PURC itself insists it needs enough time to decide on the long anticipated new tariff levels, and indeed it is being forced to wait for revised proposals from stakeholders including utility companies.
However, industry is growing increasingly unsettled by the delay and is consequently growing impatient as it waits for the commission to announce the new tariffs, the announcement of which has gone through several postponements since February this year. Usually, new annual tariffs are announced between the last month of the preceding year and the end of the first quarter of the applicable year. Manufacturers and other energy intensive industries are complaining that financial forecasting and budgeting for 2019 has become virtually impossible since they have no idea how much they will have to pay for power during the rest of this year. For instance, power accounts for as much as a third of the running costs incurred by mining companies, and uncertainties as to the power tariffs translate to uncertainties as to their overall operating costs and consequently their expected profitability.
In January this year, the Public Relations Officer of PURC, Bawa Munkaila said the earlier dates set to announce the new tariffs – the latest at that time being December 9, 2018 – were postponed to allow the Power Distribution Services, the electricity distribution concessionaire, take over the distribution of power and present appropriate data for the announcement of the new tariffs.
But the Director of Regulations at the PURC, Dr. Simons Yao Akorli speaking to the Goldstreet Business, says the Commission is always tactful on issues of new tariffs so as to make all stakeholders comfortable.
“The PURC is determined to protect the interest of consumers and that of utility service providers by ensuring their financial viabilities and this needs a lot of work to be done.”
The phenomenon, Dr. Akorli said, demands for the need to balance the interest of both consumers and service providers and that is usually difficult and needs a lot of time.
Meanwhile, the PURC argues that when all interests are not well captured within the pricing structure for a new utility tariff, an unsustainable price could be derived, not reflecting industry’s ability to produce quality power for consumption.
He said, “a typical challenge of the PURC is how to match the price that consumers expect to pay and the quality that they expect to be delivered”.