Saturday, February 6, 2010

Looming danger of energy crisis in Ghana-Masses to pay?

Three years ago the Electricity Company of Ghana started a pilot program to install prepaid meters in homes to replace the postpaid ones which comes with often delayed monthly bills. The postpaid system was fraught with a lot of problems.It allowed customers to accumulate high bills over long periods.

A task force had to go round to disconnect the electricity of defaulting customers, who were only reconnected after the payment of a reconnection fee in addition to the outstanding bill. Daring households would sometimes look for a local "electricity physician" who used the crudest means to put power back through the lines or other times temper the metres to read irregularly. Others tapped main electric poles to connect wires into their houses for power, the unlucky ones were occasionally caught or got burnt to a charred state. With the new prepaid metres now,customers consume wisely what pay for.

In 1997/98 and 2006/07 Ghana suffered major energy crisis having to undertake a power rationing programme which lasted a full year each in both cases.

Thursday the Daily Graphic reported that Ghana’s capacity to generate energy for industrial, commercial and domestic use is in serious crisis because of the failure of mining companies, industries, ministries, departments and agencies to pay the huge sums of money they owe to the Volta River Authority (VRA).

Admittedly the VRA says that it can no longer sustain its operations from the regular returns paid by loyal consumers. The Authority is therefore pressing for an anomalous 150% increment in tariffs, as it appears that the big companies are reluctant to pay their huge debts that have run the authority into a financial distress.

Therefore the urgent solution being proffered is to shift the burden on to masses of the country while the mining companies and industries are left free. It’s so unfair that household consumers will have to suffer for the inefficiency of VRA to mobilize its debts from defaulting companies. By common sense understanding, the situation suggests that mining companies are having a field day in Ghana at the expense of the ordinary larger majority of Ghanaians (no apologies for my bias against Mining Companies). So much gold, diamond and other resources that these companies mine out of Ghana every year, they pay next to nothing using our energy for free while repatriating abnormal profits to their foreign owners and entities who have turned Ghana into a client state. This is undoubtedly draconian and sinister to say the least.

To make valid the excuse for the suggested increment in tariffs, the Head of Public Relations at the VRA, Mrs Gertrude Koomson said in an interview that the currents tariffs are out of date, owing to the reason that their body was allowed to increase tariffs in November 2007 sanctioned by the Public Utilities and Regulatory Commission (PURC). But the reasons do not only end there, we are also being told production cost of one unity of energy has depreciated by 50 percent. In my opinion these are only diversionary to cover up how the debts have been accumulated all these years. Again it’s very difficult to acknowledge the reason that in November 2007 when the tariffs were revised there was an understanding that Ghana would receive natural gas which was cheaper to augment operations, to run the plants. Guess what? “The gas has still not arrived”, they say, forcing the VRA to rely on the relatively expensive crude.

Its likely that the VRA will have a hard time to push through the proposed 150% increment to the PURC. Public commentary seem to be against the move. I would have supported a lesser percentage increment if the reason was to expand operations to non-connected and deprived areas other than bail out a certain mining company that pollutes water bodies with cyanide and destroys the environment,when its profits benefits me not.

The question to ask is whether the looming crisis is the effect of mining companies, industries, ministries, departments and agencies failure to pay the huge sums of money they owe to the Volta River Authority (VRA)? Or the current tariffs are stale? Or is it the VRA’s inefficiency to collect its debts?

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