The Electricity Company of Ghana (ECG) has emphasized the need for clarity and constructive leadership in the Public Utilities Regulatory Commission’s (PURC) review of the Cash Waterfall Mechanism (CWM).
ECG indicated that Ghana’s upcoming national election underscores the importance of institutions like PURC in maintaining stability and transparency.
ECG noted that PURC’s CWM review has raised concerns, primarily related to how the findings are presented and communicated, rather than the facts themselves.
ECG stated that Dr. Ishmael Ackah’s leadership at PURC overlooked a chance to showcase ECG’s achievements in the energy sector, a crucial aspect of Ghana’s development.
“A key point of contention in the PURC’s report is the labeling of essential fuel costs as a ‘variance’. This characterization can be misleading. What is referred to as a variance is, in fact, the cost of fuel—a necessary part of ECG’s operations that has been managed effectively by the current leadership”.
“Unlike in previous years, ECG has taken strides to ensure its ability to procure fuel independently, a significant achievement that should be acknowledged rather than downplayed. The leadership of ECG has worked diligently to stabilize operations and improve performance, especially in areas where previous management struggled”.
The Electricity Company of Ghana (ECG)
ECG further noted that fuel procurement showcases ECG’s progress, indicating that regulatory bodies like PURC should accurately frame sector challenges and successes.
As such, ECG maintained that labeling fuel costs as ‘variance’ in the CWM report obscures ECG’s improved performance.
As such, ECG indicated that this necessary operational cost deserves a nuanced explanation, not misinterpretation.
ECG indicated that clarification is needed on Independent Power Producers (IPP) payments stressing that it made full payments to Tier 2 beneficiaries, including PURC, during the review period.
ECG stated that delayed IPP payments were mainly used to settle previous months’ outstanding amounts, a standard accounting practice, emphasizing that this context is crucial to understanding the payment flow and shouldn’t be misinterpreted as non-compliance.
ECG asserted that the report overlooks foreign exchange losses impacting ECG’s financial obligations. PURC’s exchange rate differs from the market and Bank of Ghana rates, causing significant losses when paying IPPs and WAPCo.
For example, ECG noted that its $3 million payment to WAPCo in July 2024 was recorded as GHS48 million, but PURC reported it as GHS43 million. Forex fluctuations are to blame, and a clearer explanation is needed to avoid misrepresenting underpayment.
ECG’s Proactive Move Saves Power Supply
Furthermore, ECG stated that its independent purchase of liquid fuel, totaling GHS466 million, was crucial to maintaining power supply stability amidst unforeseen gas supply challenges.
The Company stated that this proactive move should be recognized as a success, rather than labeled a failure or variance, as it ensured continued electricity provision.
ECG stressed that the PURC’s role as a regulator is to provide clarity and support for the continued progress of the energy sector.
“It is important that reports like the CWM review focus on providing accurate and constructive information that supports transparency and helps stakeholders understand the full picture. By framing necessary costs like fuel procurement as variances, the PURC risks confusing the public and detracting from the real improvements made by ECG and other players in the sector”.
“As we look ahead to the upcoming national election, the energy sector will continue to play a crucial role in Ghana’s development. The leadership of key institutions, including both ECG and the PURC, will be instrumental in ensuring that we continue on a path of progress and stability”.
The Electricity Company of Ghana (ECG)
As such, the Company urged PURC to adopt a more collaborative approach, emphasizing transparency, constructive criticism, and acknowledgment of sector advancements.
ECG indicated that Ghana’s energy sector is thriving due to enhanced management and operational efficiency.
Accordingly, ECG emphasized that its independent fuel procurement success underscores progress under its current leadership.
The Company indicated that to overcome future challenges, regulatory bodies must partner with institutions to drive growth and sustainability.
According to ECG, PURC’s CWM review demands careful consideration.
As such, ECG urged Dr. Ishmael Ackah and his team to adopt constructive leadership, providing clear insights that promote sector progress, innovation, and collaboration, rather than obscuring it with misleading narratives.
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