Electricity Company of Ghana Limited

ELECTRICITY COMPANY OF GHANA LIMITED
PROPOSAL
FOR
ELECTRICITY DISTRIBUTION AND SUPPLY
AGGREGATE REVENUE REQUIREMENT AND TARIFF
MARCH 2022
PROPOSALS FOR REVIEW OF ELECTRICITY DISTRIBUTION AND SUPPLY AGGREGATE REVENUE REQUIREMENT AND TARIFF
TABLE OF CONTENTS
TABLE OF CONTENTS.............................................................................................................................. i
LIST OF TABLES ..................................................................................................................................... iii
1 Introduction ............................................................................................................................... 1
1.1 Brief Background on Electricity Distribution and Supply Operations ......................... 1
1.2 Rationale/Objectives Underpinning Tariff Submission ................................................ 3
1.2.1 Proposed Two-Block Tariff for Residential and Non-Residential Customers ............. 3
1.3 Highlights of Major Issues Which Describe Structure of Tariff Submission ............... 4
Graph 1 Unstable Macroeconomic Variables .............................................................................. 5
Graph 2 World Market Prices of Metals....................................................................................... 6
Graph 3 Levels of Power Procurement Costs (Ghp/KWh) ......................................................... 7
2 Initiatives Undertaken Since July 2019 Tariff Review............................................................... 9
2.1 Projects Undertaken and Impact .................................................................................. 9
Graph 4 Impact of CAPEX on Reliability..................................................................................... 10
2.2 Compliance with Directives of the Commission ......................................................... 10
3 Key Policy Issues for Tariff Consideration .............................................................................. 10
3.1 Cost of Stranded Assets .............................................................................................. 12
4 Proposed Service Delivery and Efficiency Improvements During Tariff Period ................... 13
4.1 Service Delivery and Efficiency Targets ...................................................................... 13
4.2 Technical / Operating Performance Indicators/Indices .............................................. 14
4.3 Financial Performance Indicators/Indices................................................................... 16
5 Key Challenges Likely to Impact Service Delivery .................................................................. 18
5.1 Metering Including Prepayment Metering ................................................................. 18
5.2 Energy Audit ................................................................................................................. 19
5.3 Theft of Power, Cables and Equipment ...................................................................... 20
5.4 Loss Control-Technical and Commercial ..................................................................... 21
5.5 Availability/Reliability of Supply - Quality of Service .................................................. 22
5.6 Suppressed Demand .................................................................................................... 23
5.7 Management Information System Including E-Payment........................................... 24
5.8 Billing and Collection.................................................................................................... 24
Graph 5 E-Payment System - ECG Power (ECG Mobile App) ................................................... 26
5.9 Organisational Reform & Restructuring ..................................................................... 26
5.10 Customer Complaints & Dispute Resolution .............................................................. 26
5.11 Resolution of Court Cases ........................................................................................... 27
Electricity Company of Ghana i

5.12 Government and Public Sector Debts......................................................................... 27

5.13 Bad & Doubtful Debts .................................................................................................. 28
5.14 Surcharge & Subsidies ................................................................................................. 28
5.15 Government Grants ..................................................................................................... 29
5.16 Access to Finance and Repayment of Financing Costs .............................................. 29
5.17 Tariff Structure and Rates Design ............................................................................... 29
5.18 Introduction of Wholesale Electricity Market ............................................................ 30
5.19 Wholesale Market Bulk Customers Embedded in Distribution Network.................. 32
5.20 Embedded Generators and Interconnection.............................................................. 34
5.20.1 Embedded Generators and Interconnection .............................................................. 35
5.21 Power Procurement from Independent Power Producers and Renewable Energy
Generators …………………………………………………………………………………………………………………………………35
5.22 Human Resource-Skilled Manpower........................................................................... 37
6 Strategies to Address Key Challenges .................................................................................... 37
7 Total Distribution Utility System Load at Peak....................................................................... 38
8 Regulated Market Customers ................................................................................................. 38
8.1 Regulated Market - Non-Special Load Tariff Customers .............................................. 38
8.2 Regulated Market - Special Load Tariff Customers ....................................................... 38
9 Deregulated Market-Energy Commission Licensed Bulk Customers Embedded in the
Network …………………………………………………………………………………………………………………………………………38
10 Base Load ................................................................................................................................. 39
11 Forecast of Energy to be Purchased ....................................................................................... 39
11.1 Electricity Demand Forecast (2022 - 2026) ................................................................. 39
11.2 Non-Conventional Energy - Renewable Energy (GWh) .............................................. 40
12 Distribution System Losses at Various Voltage Levels........................................................... 40
12.1 Distribution system losses at the various voltage levels in ECG ................................. 40
13 Customer Population by Classification ................................................................................... 40
13.1 Regulated Market Customers ..................................................................................... 40
13.2 Deregulated Market-Energy Commission Licensed Bulk Customers Embedded in
the Network ..................................................................................................................................... 41
14 Energy Allocated to Public Lighting (GWh) ............................................................................ 41
14.1 Energy Allocated to Public Lighting (GWh) ................................................................ 42
15 Distribution Company's System Load Data ............................................................................ 43
Table-1 System Load Data 2022-2026 .............................................................................................. 43
16 Capital Expenditure ................................................................................................................. 43
Electricity Company of Ghana ii

Table-2 Summary of Capital Investment Plan (USD) 2022-2026 ................................................... 44

Graph 6 Graphical View of ECG’s Total Capital Expenditure (USD) 2022-2026 ....................... 44
16.1 Capital Expenditure Financing Plan............................................................................. 45
Table-3 Summary of Capital Expenditure Financing Plan (Million GHS) 2022-2026.................... 45
17 Operation and Maintenance Costs ......................................................................................... 45
Table-4 Operation and Maintenance Costs (Million GHS) 2022-2026 .......................................... 45
18 Administration and General Costs .......................................................................................... 45
19 Human Resource Costs - Employee Costs .............................................................................. 45
Table-6 Human Resource Costs (Million GHS) 2022-2026 ............................................................ 45
20 Public Education....................................................................................................................... 46
21 Financing and Interest Costs: .................................................................................................. 46
22 Return on Equity ...................................................................................................................... 46
23 Depreciation ............................................................................................................................. 46
24 Projected Electricity Distribution Revenue Requirement ...................................................... 47
25 Proposed Tariff and Rates Structure ...................................................................................... 47
25.1 Projected Purchases and Sales .................................................................................... 48
25.2 Multi-Year Tariff Proposal (2022-2026) ....................................................................... 49
25.3 Summary of Multi-Year Tariff Proposal (2022-2026) .................................................. 49
26 Conclusion ................................................................................................................................ 49
27 References ............................................................................................................................... 51
LIST OF TABLES
Table-1 System Load Data 2022-2026 ........................................................................................... 43
Table-2 Summary of Capital Investment Plan (Million GHS) 2022-2026 ..................................... 44
Table-3 Summary of Capital Expenditure Financing Plan (Million GHS) 2022-2026................... 45
Table-4 Operation and Maintenance Costs (Million GHS) 2022-2026 ......................................... 45
Table-5 Administration and General Costs (Million GHS) 2022-2026 .......................................... 45
Table-6 Human Resource Costs (Million GHS) 2022-2026 ........................................................... 45
Table-7 Summary of Public Education Costs (Million GHS) 2022-2026 ....................................... 46
Table-8 Financing and Interest Costs (Million GHS) 2022-2026 .................................................. 46
Table-9 Equity Financing Costs (%) 2022-2026.............................................................................. 46
Table-10 Equity Financing Costs (%) 2022-2026.............................................................................. 46
Table-11 Summary of Distribution Company's Revenue Requirement(Million GHS)2022-2026. 47
Electricity Company of Ghana iii

1 Introduction
The Electricity Company of Ghana (ECG) is the main and major Distribution Company in the
Southern part of Ghana. Over the years, ECG has experienced numerous challenges including
unstable macro-economic variables such as inflation and exchange rates; increase in world market
prices of distribution inputs; increased cost of operations due to rapid customer growth; high cost
of power procurement; etc. Additionally, the inadequacy of approved tariffs mainly the
Distribution Service Charge (DSC1) for the company over the past few years has made it difficult to
survive in the mist of these challenges. The situation has had a negative impact on ECG’s financial
position with an urgent need for support to ensure the financial viability of ECG and ultimately the
energy sector.
As required by the Commission, ECG presents its proposal for another major tariff review at the
end of the current 2019-2021 regulatory period (end of June 2021). ECG has highlighted critical
issues for consideration in this major tariff review proposal. It is expected that measures would be
taken in due course by stakeholders including the Commission and Government by ensuring that
ECG as the country’s major distribution company, attains tariffs that reflect actual cost. This would
help resolve some of the above-mentioned challenges faced by the company.
The proposal justifies ECG’s request for the specified aggregate revenue requirement for the 5-
year tariff regime, that is the regulatory period 2022 - 2026. This proposal is partly aligned to some
ECG documents such as Strategy document (2021-2024), financial statements and 2021 budget.
1.1 Brief Background on Electricity Distribution and Supply Operations

The period under review marked a significant occurrence in the history of the company. This saw
the implementation of Private Sector Participation (PSP) in the distribution industry of Ghana.
Specifically, the Government assigned ECG’s Distribution and Supply Operations to a Private
Company known as Power Distribution Services Limited (PDS) on March 1, 2019. The PSP took the
form of a Concession Agreement signed for a term of twenty (20) years. While ECG became the
Asset Owner and a Brokerage Company known as Re-Structured ECG with a very small number of
staff. This ECG-PSP was later terminated about eight (8) months after its implementation.
At the beginning of the last regulatory period, PURC had approved a new tariff effective July 1,
2019 for the Concessionaire. This approved tariff (DSC1) showed an average reduction of 14% on the
previous DSC1 approved and gazetted in March 2018. This 2019-2020 tariff decision by PURC had
been based on the separate tariff proposals by PDS and Re-Structured ECG. This is because during
this period the Asset Owner was not the same as the Operator. At the termination of the PSP by
ELECTRICITY COMPANY OF GHANA LIMITED 1

government, ECG took back the business of Distribution and Supply (ie. Asset Owner was the same
as Operator) and as such continued with the implementation of the existing DSC1 which was
effective October 1, 2019 due to the Automatic Adjustment Formula (AAF).
The regulatory period encountered several government policy directives which impacted on ECG’s
operations and would continue to be significant interventions in the energy sector. These
directives saw the implementation of the renegotiation of generation prices in the PPAs (referred
to as Project Light) which is ongoing, the institutionalisation of the Cash Waterfall Mechanism
(CWM) to ensure equity in the sharing of sales revenues among players in the energy market, etc.
The period under review continues to experience the devastating effect of the perilous nature of
the COVID-19 pandemic. Its adverse impact on ECG’s operations cannot be overemphasised. It
subjected the company to low revenue collections, low revenue protection and other monitoring
activities, low productivity due to GOG directives to run staff shift system, etc. The reduced level of
activities due to the pandemic contributed to the non-achievement of target set to help meet
benchmarks for system losses and revenue collection. The performance in system losses and
revenue collection for 2021 was 29.84% and 87.01% respectively.
The regulatory period also experienced considerable outages occasioned by the pigging exercise
(January 20 to March 19, 2020) on the West African Gas Pipeline. These and other outages such as
the current ones being experienced stemmed from Transmission operations by the Ghana Grid
Company Limited (GRIDCo) and therefore was beyond ECG’s control. Additionally, some outages
emanated from the company’s distribution network due to both planned and unplanned outages.
These outages and other technical challenges in ECG’s distribution network encountered during
the period resulted in the reliability performance shown in table 4.2.1.
Customer service delivery saw some improvements in terms of new connections (new service,
separate meter and SHEP), replacement of aged and faulty meters, resolution of complaints
lodged, etc. Customer population also grew by 10% and 8% for 2020 and 2021 respectively. The
deployment of prepayment meters continued to be key in helping reduce customer debt and
improve revenue collection. Currently, the percentage of credit customers to prepayment
customers is about 47% to 53%.
The approved DSC1 for the 2019-2020 regulatory period was undeniably inadequate and does not
meet the actual cost of ECG’s operations. The continual application of this inadequate tariff
beyond the stipulated regulatory period (2019-2020) coupled with the current economic situation
has worsened ECG’s financial situation. ECG is currently struggling to meet the increased cost of

operations and therefore requires financial support through a full cost recovery tariff that covers
distribution cost. The financial support would help ECG to ensure sustained investment for reliable
and quality supply of service to our cherished customers.
1.2 Rationale/Objectives Underpinning Tariff Submission

As mentioned earlier, the inadequacy of the current DSC1 has eroded the financial viability of ECG
which has had an adverse impact on the entire sector. This forms the basis of ECG’s objectives in
this tariff submission for the regulatory period 2022 – 2026. ECG’s objectives therefore include the
following:
a. To propose a full cost recovery tariff that incorporates the actual cost of generation, agreed
cost of transmission and particularly the DSC1 which is expected to increase considerably and
gain an equitable share of an approved EUT. Also, to propose minimal increases in DSC2 to
support the proposed distribution losses for the 5-year tariff regime.
b. To propose a gradual approach to achieve a cost of service allocation within the tariff structure
to avert distortions in pricing signals to some customers and the dissatisfaction of other
customers who may seek cheaper supply options. Efforts must be made to eventually attain a
cost of service tariff allocation which eliminates cross-subsidization and promote a non-
discriminatory tariff.
c. To propose the continuation of lifeline tariffs (exclusively 0-50 kWh) for residential customers
and similarly introduce a defined threshold with a lower tariff for low-income commercial
customers as the first block tariff for residential and non-residential customers respectively.
d. To propose a two-band or block tariff for Non-Special Load Tariff (NSLT) customer groups. This
is aimed at eliminating the multiple tariff bands or blocks associated with progressive tariffs. A
two-band tariff rate design would be simple, easy to implement by all utilities and would be
easily understood by end users. The proposed two-band tariff for residential and non-
residential customer groups is shown in table 1.2.1 below.
1.2.1 Proposed Two-Block Tariff for Residential and Non-Residential Customers
Category First Tariff Block Second Tariff Block
Lifeline Tariff exclusively for Tariff applicable to all non-lifeline

Residential 0-50 kWh customers
Lower Tariff exclusively for a Tariff applicable to all customers

Non-Residential defined threshold (kWh) outside the defined threshold

e. To propose the introduction of streetlight tariffs in the tariff structure to help account for the
cost of streetlight consumption as the public light levy covers only about 30% of the actual cost
of streetlight consumption.
f. To propose the cost of reserve margin (18%) to be recovered in the tariff as this reserve margin
capacity impacts the entire sector, its cost therefore needs to be considered in a manner that is
appropriate for the entire sector.
g. To propose the recovery of investment costs for projects completed, ongoing and planned for
the five-year regulatory period.
1.3 Highlights of Major Issues Which Describe Structure of Tariff Submission

The structure of ECG’s tariff submission is impacted by the issues discussed as follows:
a. Macroeconomic Factors: Macroeconomic variables such as inflation and exchange rates have
affected ECG considerably since the last regulatory period. The Automatic Adjustment Formula
(AAF) over the period did not make any compensation for the company in terms of the
depreciation of the Ghana cedis (GHS). During the last regulatory period (July 2019), the only
adjustment that took place was the October 2019 increase of 0.47%.
At the commencement of the last regulatory period (July 2019), inflation rate was 8% however
as at the end of the first quarter 2022, the inflation rate had more than doubled to 19.4%. The
unstable exchange and inflation rate has led to increased cost of both imported and local
materials required by ECG to serve its customers. This phenomenon has also impacted on the
cost of borrowing to finance projects. The weighted average inflation rate used in this tariff
submission is approximately 7% based on the ratio of 20% and 80% for USA and Ghana
respectively. The proposed 20% US inflation rate is a reflection of ECG’s dependence on the
dollar currency as the major currency used in about 80% of ECG’s foreign transactions (material
imports, project costs, etc).
ECG bears the exchange rate risk in Power Purchase Agreements (PPAs). Similarly, in July 2019,
the exchange rate in Ghana was 1 dollar to 5.05 Ghana cedis, however as at the end of the first
quarter 2022, 1 dollar was equivalent to 7.11 (Bank of Ghana rate) Ghana cedis, representing an
increase of about 40.8%. The market exchange rate for this same period is 7.8 as against the
7.11. Currently, the exchange rate used for the prevailing tariff is 5.3767 as against the actual
paid rates (market rates) which ranged from 5.7950 to 6.3605 as at the end of December 2021.
This gap in the exchange rate resulted in forex loss of GHS867.23 million in power procurement

cost to ECG at the end of 2021 as shown in table 1.3.1. Graph 1 shows the trend of the unstable
macroeconomic variables (inflation and exchange) during these last few years.
Graph 1 Unstable Macroeconomic Variables
Source: Ghana Statistical Service Source: Bank of Ghana
1.3.1 Forex Losses to ECG in 2021
SUMMARY OF FOREIGN EXCHANGE LOSS (JAN - DEC 2021)
Total Charge at PURC Actual Charge to be

Energy Delivered Total Charge Forex Losses
No IPP Rate 5.3767 Paid 5.7950 - 6.3605
(kWh) (USD) (GHS)
(GHS) (GHS)
1 CENIT 469,165,700.00 61,259,029.91 329,371,426.12 365,788,745.19 (36,417,319.07)
2 Sunon Asogli 2,984,234,700.00 333,481,855.87 1,793,031,894.46 1,986,805,984.87 (193,774,090.41)
3 Bui Power 1,004,637,429.16 103,060,803.49 554,127,022.12 626,270,952.44 (72,143,930.31)
4 Karpowership 2,132,225,200.00 376,036,821.71 2,021,837,179.29 2,245,475,270.88 (223,638,091.60)
5 BXC 29,290,813.44 5,889,349.69 31,665,266.48 35,272,038.79 (3,606,772.31)
6 Cenpower 1,743,955,600.00 275,934,657.21 1,483,617,871.42 1,655,977,907.84 (172,360,036.42)

7 Ameri - - -
8 Meinergy 26,832,880.94 4,896,034.77 26,324,510.15 29,343,732.47 (3,019,222.32)
9 Amandi 1,078,957,300.00 98,800,501.70 531,220,657.49 602,218,480.51 (70,997,823.02)
10 AKSA Energy 350,832,880.00 149,786,658.56 805,357,927.08 896,629,976.73 (91,272,049.65)
Total 9,820,132,503.54 1,409,145,712.91 7,576,553,754.60 8,443,783,089.73 (867,229,335.12)
Source of Market Exchange Rate: Monthly Average Indicative Rate (Ecobank & SCB)
The exchange rate of a dollar equivalent in Ghana cedis applied in this tariff submission ranges
from 6.49 to 8.17 for the period 2022 to 2026 respectively. These projected exchange rate
figures are expected to be adjusted (AAF) to reflect actual exchange rates over the five-year
tariff period.

b. Metal Prices: A major input for ECG’s operations is the procurement of equipment made up of
key metals such as Aluminium and Copper. Over the last two years, world market prices for
Copper and Aluminium have consistently increased at an average rate of 3.37% and 3.41% per
month respectively. These are substantial increases compared to that of previous years’
monthly averages. This trend of increasing metal prices undoubtedly has a direct impact on
ECG’s operations. Graph 2 below illustrates this trend.
Graph 2 World Market Prices of Metals
Source: Trading Economics
c. Unrecovered Pass-Through Power Procurement Costs: The significance of power procurement

to ECG cannot be over emphasised. As a major determinant of the company’s ability to
continuously supply power to its cherished customers, ECG has signed Power Purchase
Agreement (PPAs) with Independent Power Producers (IPPs). The various prices agreed with
IPPs and finally approved by PURC have become a burden on the company as PURC gazetted
tariffs indicate lower prices for generation as compared to actual prices in the PPAs. The result
has been the huge unpaid IPP invoices in dollars with its associated forex losses. Additionally,
cost associated with variations in dispatch (hydro and thermal mix) as well as generation fuel
prices are not compensated through the AAF.
Reserve Margin (18%) which is also currently not considered as a pass-through cost has been a
liability to ECG although the benefits of reserve margin go beyond ECG’s operational zone. The
cost of reserve margin to ECG at the end December 2021 was estimated at $164.18million for
318MW. It is estimated that during the five-year regulatory period, reserve margin would cost
about $670million.
To propose the required revenue to enable the company to pay IPPs appropriately as well as
pay other debt, various scenarios of power procurement cost analysis were examined. Out of

the four levels of power procurement costs analysed, the option selected for the tariff
proposal excluded the cost of reserve margin. The volume of power to be purchased from the
various generation plants or IPPs during the five-year regulatory period was projected based
on the estimated growth in demand. The scenarios of power procurement costs are shown in
graph 3.
Graph 3 Levels of Power Procurement Costs (Ghp/KWh)
d. Structure of the Prevailing Tariff: The prevailing tariff is designed to have multiple and
progressive band tariffs. This type of structure is complex and not convenient for customers
and distributing utilities such as ECG. Customers find it difficult to understand their bill and are
not motivated to pay their electricity bills voluntarily. On the other hand, ECG has no option but
to purchase costly meters customised to align with the multiple and progressive band tariffs.
ECG is therefore proposing that the multiple and progressive band tariff should be collapsed
into a two-band tariff for residential and non-residential customers. The two-band tariff for
residential customers would be made up of a lifeline tariff (exclusively 0-50kWh) and a flat rate
for all other customers. Similarly, the two-band tariff for non-residential customers would be
made up of a lifeline (an agreed threshold) tariff and a flat rate for all other non-residential
customers.
e. Cost of Service Allocation within the Tariff Structure: The design of the prevailing tariff also
incorporates cross-subsidization among customer categories. The cross-subsidization allows

Special Load Tariff (SLT or industrial) customers to subsidize the lower tariff allocated to
residential customers. This causes distortions in price signals to these beneficiary customers.
This situation turns out to be a disincentive to SLT customers as their tariff is much higher than
it cost ECG to provide supply to them. Some dissatisfied SLT customers tend to look for
cheaper supply options and can move to other suppliers rendering ECG’s network redundant.
Therefore, eventually attaining a cost of service tariff would eliminate cross-subsidization and
its associated challenges.
f. Inadequate Distribution Service Charge (DSC1): The last regulatory period (July 2019) saw an
approved tariff for a distribution business which was made up of an Asset Owner and an
Operator. This July 2019 approved tariff also saw an unexpected reduction which altered
historical trends significantly. That is, the approved tariff (DSC1) showed an average reduction
of 14% on the previous tariff gazetted in March 2018. The effect was a widened gap between
the prevailing tariff and an actual cost recovery tariff. The current DSC1 (16.1094GHp/KWh) is
therefore extremely inadequate and does not meet ECG’s distribution cost.
This wide gap has significantly impacted the tariff submission as the actual cost recovery tariff
proposed is primarily higher in the first year (2022) of the five-year period. The effect of the
approval of very low tariffs (DSC1) in the past threatens subsequent and future tariff
submissions and therefore appropriate steps must be taken to minimise or eliminate the gap.
g. Cash Waterfall Mechanism: The CWM implemented in April 2020 was modelled on Utilities’
percentage share of the current End User Tariff (EUT). Consequently, the DSC1 which had
experience very low increases in the past as well as recent reductions as discussed above,
became a great disadvantage to the company. ECG’s share of the CWM is therefore based on
the current DSC1 (16.1094GHp/KWh) which forms 23% of the current EUT. In this tariff
submission, the DSC1 is expected to increase considerably, attain the cost recovery level and
gain an equitable share of an approved EUT during the 5-year period to help improve the
financial status of ECG.
h. Recovery of Investment Costs: The company undertakes regular investments to avoid the
distribution effect of under critical investments. During the last regulatory period, several
investment projects were ongoing. Many of these projects have been completed and
commissioned accordingly. These huge investment costs required to improve service delivery
have significant impact on the revenue requirements for the company. Investment costs
factored in this proposal has therefore been limited to completed, ongoing and planned

(committed and most feasible) investments projects. This categorization of ECG’s total capital
investments incorporated in the tariff proposal for the five-year period is shown in graph 6.
2 Initiatives Undertaken Since July 2019 Tariff Review

ECG had embarked on several projects to improve service delivery to its cherished customers in all
ECG operational areas before and after July 2019. Some of these projects which were before July
2019 have now been completed though others remain ongoing.
2.1 Projects Undertaken and Impact

Over the years, ECG has invested heavily in maintaining, upgrading and expanding the distribution
network for the supply of power to customers within ECG’s distribution system. These investments
are geared towards meeting not just the high demand for power supply but also to maintain high
level of reliability and quality of supply to our cherished customers. Majority of these network
investments were undertaken in Greater Accra region which has the highest demand for power.
During the period 2017 - 2020, ECG invested a total of USD57.63 million in the construction and
upgrade of Bulk Supply Points (BSPs), primary substations and switching stations; USD66.52
million in the construction of sub-transmission networks; USD1.05 million on specialised tools for
live-line work and USD3.33 million in the provision of voltage improvements in the distribution
network it operates. Additionally, the company spent USD67.80 million and USD34.32 million on
meters and service cables respectively.
Projects completed in 2021 include the following: USD26.03 million for sub-transmission
improvement projects (construction, expansion and reinforcement of BSPs, substations, feeders
and overhead lines); USD1.3 million for system improvement projects; USD1.8 million for network
expansion and special grid intensification projects; and USD0.54 million for rural network
expansion projects. These investments ensured the availability of reliable and quality supply of
power to customers. This is illustrated in graph 4 which depicts the impact of projects undertaken
on reliability.
In addition to the investments undertaken by ECG, the Government of Ghana through the rural
electrification and grid extension projects invested a total of USD97 million to extend power
supply to communities in Ashanti, Western, Eastern and Volta regions. ECG on its part provided
technical supervision for these projects. The total investment cost of completed projects before
and during the regulatory period (2019 – 2020) was USD393.12 million. Projects completed in 2021
also cost USD29.16 million.

Graph 4 Impact of CAPEX on Reliability
There are also several ongoing projects in all ECG operational regions. These includes construction
of primary substations and switching stations, sub-transmission and primary distribution lines,
expansion of low voltage networks etc. The total investment cost for ongoing projects was
USD274.42 million as at the end of December 2021. Details of these projects are attached as
separate documentations.
2.2 Compliance with Directives of the Commission

The company has often made frantic effort to comply with the Commission’s directives, policies
and or regulations that govern distribution companies. During the period under review, all
requests and directives from the Commission were responded to accordingly to meet ECG’s set
benchmark for regulatory compliance.
Commercial complaints received from PURC on behalf of aggrieved customers were duly
addressed and the commission informed accordingly. Annual submissions on reliability and
regulatory data to the commission were also done accordingly. This comprises reports on outages,
technical activities, maintenance activities and schedules, on-going and planned key capital
projects. ECG would continue to comply with all directives of the Commission during the upcoming
regulatory period.
3 Key Policy Issues for Tariff Consideration

ECG’s tariff submission makes consideration for the following:
a. Disaggregation of DSC to reflect the implementation of the Wholesale Electricity Market

(WEM): The Ministry of Energy (MoEn) through GRIDCo is working towards the

implementation of the Wholesale Electricity Market which requires that numerous power
producers would be available to sell power generated to Bulk Customers (BCs) and
Distribution Companies (Discos). If applicable, BCs could procure the services of Discos to
wheel their contracted energy to their offtake points. It is required that the PURC
disaggregates the approved DSC to spell out the values for sub-transmission voltage (33kV),
medium voltage (11kV) and low voltage levels to facilitate the implementation of WEM.
b. Separation of Distribution Network Tariff and Retail Sales Tariff: The importance of separating
distribution network tariff from retail sales tariff was discussed during the last regulatory
period. ECG recommends the consideration of this concept during the five-year regulatory
period. It is expected that a distribution charge or tariff would be a fixed cost for customers in
the event of retail sales business. Also, the distribution tariff should ideally be a cost recovery
pricing for the distribution company’s network.
c. Cost of Service Pricing: Identifying cost by customer class and making true allocation has
become necessary in recent times. Cross-subsidization favours residential customers whose
cost of service is higher compared to industrial (SLT) customers. This phenomenon has a direct
consequence on the distribution utility which is either forced into negotiating lower tariffs with
the burdened SLT customers or lose such valuable customers. It is therefore imperative to
have cross-subsidies between customer classes removed entirely by beginning with the
gradual decrease of the margins year by year during this 5-year tariff period.
d. Two-Block Tariff for Non-Special Load Tariff (NSLT) Customer Groups: The interpretation of the
prevailing residential and non-residential tariffs, particularly under prepayment metering has
become very problematic and confusing due to the progressive nature of the tariff and the
presence of many blocks or bands within the customer groups. The presence of multiple block
tariff which are progressive in rates makes it difficult for customers to understand their bills.
This invariably becomes a deterrent to customers regarding the payment of bills.
Additionally, the implementation of a tariff which has multiple bands has led to the
procurement of prepayment meters which are customised in nature and very expensive
compared to the normal prepaid meters.
ECG strongly recommends that the Commission considers the two-band tariff for NSLT
customers. For residential customers the first band will represent a lifeline tariff (exclusively
applicable to customers with 0-50kWh consumption per month) for the vulnerable and the
second band will be a tariff for all other residential customers. For commercial customers, a

well-defined threshold for low consumption customers such as tailoring shops, dress makers,
barbers, etc. will be the first band or block with a lower tariff whilst all other customers would
have one tariff as the second band tariff. The implementation of a two-block tariff would help
customers to easily understand their bills and therefore improve the voluntary payment of
bills. It would also help utilities to reduce cost of prepayment meters and their associated
management as more ordinary meters could be procured at reasonable prices.
e. Customer Contribution to Stranded Assets: ECG has also observed the effect of customer exit
from its distribution grid due to the implementation of the WEM. The company is modifying its
application procedures to ensure a legal requirement for customers to make a capital
contribution to stranded assets or network assets that remain unutilised upon their exit. ECG
therefore requests the Commission to come out with a directive or guidelines for the
implementation of customer contribution to stranded assets. The current cost of stranded
assets to ECG amounts to USD10.29 million as shown in table 3.1 below.
3.1 Cost of Stranded Assets
Cost of Project
No. Company Demand New Supplier Date of Exit Stranded Asset
(USD Millions)
Goldfields Ghana
VRA and then
1 Limited (Tarkwa) - 7.5MW Jul-14 Relocation of the Tarkwa Atuabo BSP 0.5
Genser
South Plant
Construction of 33kV Akyempim
1.3
Switching Station
Provision of 25km of 33kV double
circuit tower line from Akyempim to 3.89
Abosso Goldfields
2 18MW Genser Sep-17 Damang
(Damang)
Construction of XX bay 33kV Switching
2.4
Station at Damang
Relocation of the Tarkwa Atuabo BSP 0.7
Anglogold Ashanti
3 16MW VRA May-19 Relocation of the Tarkwa Atuabo BSP 1.5
Iduapriem
TOTAL (USD Millions) 10.29
f. Determination of Net Metering Tariff: The Net Metering code was passed some years ago and
recommendations were made for the Utilities to implement it on a pilot basis. Following this,
ECG together with the Energy Commission and some key stakeholders tested the functionality
of the bi-directional meter and reviewed the code to practicalize the provisions. ECG later
informed the regulators of the associated challenges and sought for support to review the
code to reflect the issues raised which included the following:

i. Energy for energy exchange mechanism. ECG had proposed a ratio of 1 : 0.6 for industrial
(SLT) customers and 1 : 0.4 for residential and non-residential customers.
ii. The annual capacity threshold to enrol customers and in general terms, the capacity caps
for various Renewable Energy (RE) technologies.
iii. Absence of a contract framework to define the conditions for entry and exit, default and
penalties and more importantly provision for customers who may game its
implementation. The gaming may happen through continuous over-generation and export
to the grid or customers who would not export power to the grid on a permanent basis.
ECG has submitted a draft contract as well as procedures for engaging customers, for the
consideration of Energy Commission and PURC as the sector prepares for the
implementation of the net metering scheme.
4 Proposed Service Delivery and Efficiency Improvements During Tariff Period

It is expected that the various projects embarked upon by ECG before and during the five-year
tariff period would bring about the required proportional improvements in the specific areas of
implementation. Such results would greatly impact service delivery and efficiency levels.
4.1 Service Delivery and Efficiency Targets

In the bid to improve service delivery to customers as well as improvements in the overall business
operations, ECG regularly sets objectives with various initiatives to execute. Continuous monitoring
of activities geared towards achieving targets are put in place. Achievements are also measured to
determine the level of performance and subsequently appropriate remedial actions are taken to
alleviate any shortfalls. ECG would continue to deploy these and other methods to achieve the
required targets.
The company’s service delivery and efficiency targets for the five-year regulatory period is derived
from its strategic plan for 2021-2024. Based on the company’s mission, vision, customer value
proposition and SCOT, the focus has been on three main areas namely Revenue Growth;
Operational Excellence; and Customer Value as summarised in the table below.
4.1.1 Service Delivery and Efficiency Targets
Revenue Growth Operational Excellence Customer Value

Achieve benchmarks for technical
Debt to Sales ratio of 20% (reliability) indicators Connect customers within 5 days after payments
Revenue increase of 98% Achieve system loss of 20% Provide value added services to customers
Other revenue increases by 10% Deliver 95% of projects on time Achieve at least 70% of customers satisfaction

With regards to revenue growth, ECG expects to achieve revenue target of 98% and a 10% increase
from other revenue sources (non-tariff charges) such as reconnection fee, application fees, penalty
on dishonoured cheques, administration fees on illegal connections, etc. ECG would procure more
smart meters to enhance its revenue growth. ECG also intends to utilize prosecution processes to
help improve revenue collection during the period.
The companies KPI’s and regulatory benchmarks such as achieving project timelines, reliability
indices, system loss, etc. would serve as a guide in the effort to attain efficiency in its operations.
The company is poised to provide value added services to its cherished customers and hopes to
achieve at least 70% customer satisfaction during the five-year tariff period. Also, the company is in
the process of reviewing its Customers Charter and would pursue measures to enhance
compliance with regulatory policies and procedures in the delivery of service to customers. Some
of the proposed value-added services to be delivered during the period include the following:
▪ Enhancement of the E-payment System (ECG Power) to benefit a wider range of

customers.
▪ Full deployment of the Web Portal which is currently under development.
▪ Increase customers participation in prompt reporting of faults, suspected illegal
connections and partnering with the communities to improve service delivery.
▪ Provision of flexible responses to service users’ complaints through our call centre, social
media apps and the web portal applications.
▪ Partnering with other players and outsourcing services to offer value for money services to
customers.
▪ Opening of new customers service centres and private vending points in newly connected
areas to ease customers payments.
▪ Provision of services such as premium service, consultancy, photovoltaic (PV) solar are also
being considered.
4.2 Technical / Operating Performance Indicators/Indices

System availability within ECG’s system currently is 99.74%. System reliability has seen consistent
improvements since 2018. Both SAIDI and SAIFI have reduced consistently with SAIDI benchmarks
also being achieved for 2019, 2020 and 2021. Although SAIFI has also seen significant improvements
since 2018, the regulatory benchmark of six (6) for all customer classes have not been achieved till
date. This is because the benchmark indices are skewed towards a relaxed benchmark on outage

duration and a more stringent requirement on outage frequency. Table 4.2.1 shows ECG’s
performance over the last few years.
4.2.1 Technical / Operating Performance Indicators/Indices
CATEGORY 2018 2019 2020 2021 BENCHMARK

SAIDI
METRO 55.93 36.9 21.95 26.63 48
URBAN 90.53 61.99 42.92 52.43 72
RURAL 100.62 79.29 51.81 56.29 144
SAIFI
METRO 36.28 24.99 15.36 17.8 6
URBAN 72.99 47.06 26.45 27.69 6
RURAL 82.05 59.2 34.19 28.12 6
CAIDI
METRO 1.54 1.48 1.43 1.50 8
URBAN 1.24 1.32 1.63 1.89 12
RURAL 1.23 1.34 1.52 2.00 24
To improve performance, ECG has adopted measures to help reduce the high SAIFI figures and
move more rapidly towards achieving the regulatory benchmarks. These measures include the
following:
a. Adopting a more coordinated approach in executing planned maintenance works such that
when any segment of the network is shut down for maintenance, all other activities that
require shut down are planned and carried out at the same time.
b. Creation of redundancy for system flexibility in the network. This is gradually being achieved as
Accra now has 4 BSPs making it easier for some customers to be supplied from other BSPs
when a BSP is shut down for maintenance.
c. Undertaking system improvement projects such as increasing transformer capacities,

installation of capacitor banks, automation of the systems, increasing sizes of conductors, and
intensive vegetation control are ways to ensure improvement in system availability, reliability
and quality of supply.
In addition to the above measures adopted, ECG has proposed to the Energy Commission a review
of the benchmarks for reliability indices as shown in table 4.2.2 to help achieve a balance between
outage duration and outage frequency.

4.2.2 ECG Proposed Technical Performance Indicators/Indices
PROPOSED EXISTING
INDEX CATEGORY
BENCHMARK BENCHMARK
METRO 48 48
SAIDI URBAN 72 72
RURAL 96 144
METRO 24 6
SAIFI URBAN 24 6
RURAL 24 6
METRO 2 8
CAIDI URBAN 3 12
RURAL 4 24
4.3 Financial Performance Indicators/Indices

ECG’s financial performance indicators for the last five years is shown in table 4.3.1 below.
4.3.1 ECG’s Financial Performance Indicators
Figures in GHS Million

No. Description CARG
2017 2018 2019 2020 2021
1 Net Sales 6,177 5,856 7,249 6,869 7,710 0.045
2 Power Purchase 4,498 6,593 8,003 8,823 9,520 0.162
3 Transmission Cost 555 387 206 904 1,014 0.128
4 Gross Profit 397 (1,954) (695) 2,972 674 0.112
5 Net Operating Profit (497) (2,266) (1,466) 181 (1,782) 0.291
6 ANFA 15,131 17,465 19,651 20,461 22,568 0.083
7 ROR on ANFA % (using profit) (410.00) (12.97) (7.46) 0.88 (7.90) 0.140
8 Current Asset 4,582 3,493 6,085 10,216 9,454 0.156
9 Current Liability 7,159 8,503 12,500 16,431 18,808 0.213
10 Stock 80 192 176 212 222 0.226
11 Current Ratio : 1 0.64 0.41 0.49 0.62 0.50 (0.05)
12 Gross Profit Profit Margin (%) 6.38 (33.08) (9.59) 43.27 8.74 0.063
13 Net Profit Margin(%) (8.05) (38.70) (20.22) 2.64 (23.11) 0.235
Power purchases cost increased significantly from GHS4,498 million in 2017 to GHS9,520 million in
2021, whiles net sales revenue increased slightly from GHS6,177 million to GHS7,710 million during
the same period. Transmission cost increased significantly during same period registering CAGR of

12.8%. The CAGR for power purchases costs recorded is 16.2%, while net sales showed a marginal
CAGR of 4.5%. This reflects the direct impact of high purchases and transmission cost on the
company’s finances. It also confirms that PURC gazetted tariffs over these periods have been
inadequate and does not meet the actual cost of distribution.
A net profit after tax of GHS181 million was recorded in 2020. This was partly due to GoG payments
to IPPs and fuel suppliers on behalf of ECG. The net profit margin deteriorated from -8.05% in 2017
to -23.11% in 2021. This was largely due to PURC’s approved bulk generation charge which have
remained lower than the PPAs prices.
The poor profitability performance of the company has resulted in a negative rate of return (ROR)
on the Average Net Fixed Asset (ANFA) during the past five-year period. This was against the
backdrop of a 10% ROR (USD) required to attract requisite investment in the distribution network.
Total assets increased from GHS15,131 million in 2017 to GHS22,568 million in 2021 representing a
CAGR of 8.3%. The increase in assets was due to investments made in the distribution network and
the revaluation during the period. The current ratio worsened by 4.7% during the period from
0.64:1 in 2017 to 0.50:1 in 2021. This is again due to the high cost of power purchases which far
exceeds the sales revenue leading to huge power purchase payables which are not fully recovered
through tariffs.
The above notwithstanding, ECG successfully contracted a GHS600 million medium term loan from
Financial Institutions in 2020, in addition to the traditional Subsidiary loans granted by Donor
Institutions.
Since April 2020, Government through ECG adopted and continue to use the CWM arrangement for
paying all stakeholders in the electricity distribution value chain. By this arrangement, ECG is
strictly limited to its share of 23% of the net tariff revenue collections. This has had severe
implications on the Company’s cashflow.
It is worth noting that payments made by Government directly to IPPs and fuel suppliers on behalf
of ECG is currently being used first to offset Government’s indebtedness to ECG and the balance as
other Government grants.
Finally, macroeconomic factors (exchange rates, inflation and interest rates), cost of reserve
margin and idle capacity, variable fuel prices, etc. continue to impact negatively on the company's
financial situation. Ultimately, these factors increase ECG’s operational costs far beyond the PURC
approved tariff thus making the company unprofitable.

5 Key Challenges Likely to Impact Service Delivery

Inadequate tariffs cause financial constraints for the company hindering efforts to make significant
investments to improve the system. It is hoped that the Commission would approve the proposed
cost recovery tariff to address the financial deficit and enable ECG to undertake the required
investments to improve service delivery. Other challenges affecting the company includes the
following.
▪ High levels of distribution losses due to theft.

▪ Inadequate revenue due to the non-payment of bills by rural communities and some residential
compound house facilities.
▪ Indiscriminate installation of unauthorized meters into ECG’s network.
▪ Movable commercial properties with meters.
▪ Unauthorised transfer of meters.
▪ Unstable Communication signals within the Telecommunication network on the smart meters.
▪ High data communication cost.
▪ Indiscriminate installation of streetlights/Public lighting systems within communities.
▪ Interference of vegetation with the network.
▪ Bird activity such as landing and taking off or building nests on pylons of power lines.
▪ Non-availability of an automated monitoring system to manage works in progress.
▪ Non-availability of critical construction materials to undertake load balancing and system
improvement.
▪ Inadequate resources to execute maintenance charts.
▪ Inaccessible or non-manageable areas.
5.1 Metering Including Prepayment Metering

Meter failure continues to impact on revenue and customer convenience. A total of 533,908 and
319,817 meters were replaced in 2019 and 2020 respectively. The projected number for meter
replacement in 2021 was 289,846. A total of 151,878 meters were installed representing 52.4%.
The corporate metering strategy is to improve customer convenience through timely service
connections; prompt resolution of metering related complaints; establishing boundary and
distribution transformer metering to segregate purchases, sales and losses per administrative
districts and regions; embarking on a program to replace obsolete and faulty meters; and
completing metering projects within cost and time.

The value chain activities to ensure these targets are enhanced include meter testing, sealing,
meter allocations, prompt processing of third-party claims and enforcement of use of the
Commercial Management System (CMS) to update and resolve all field orders.
The introduction of prepayment metering was based on the desire to improve cash flows and
manage our debtors. As at the end of December 2021, the total active customer population was
4,290,148 made up of 2,002,967 post-paid customers and 2,287,181 prepayment customers. It is
expected that most post-paid meters within the urban and metropolitan areas will gradually be
replaced with prepayment meters.
The ongoing Meter Management System (MMS) project which began in 2019 under MIDA is
expected to improve metering programmes considerably. The system shall have enough capability
for scalability to cover entire ECG operational areas and providing a joint infrastructure for a
prepayment system based on Standard Transfer Specification (STS); Advanced Metering
Infrastructure (AMI) system with head-ends for real time access to Smart Meters; and Meter Data
Management System (MDMS) that interfaces with all metering systems. A full-blown MMS once
deployed is expected to deliver for ECG a centralized End-to-End Meter Management System that
will support the following:
▪ Management of all prepayment systems by ECG with support from the vendor.
▪ Ease in accessing metering data across all meter types.
▪ Better visibility on quality of field work done by 3rd party contractors.
▪ Adequate and prompt information on what is happening on our network such as outage
frequency and duration, percentage losses, load growth, forecasting etc.
▪ Prompt access to accurate, electronic and Realtime metering data.
▪ Prepayment vending
▪ Improve Energy Accounting for loss reduction and performances.
The anticipated successful completion duration of the above project is end of 2022. It is expected
that at the inception of the MMS, some of the challenges associated with metering would be
eliminated entirely.
5.2 Energy Audit

Before 2012 the energy audit mechanism used by ECG was the meters at the Bulk Supply Points
(BSP) which served as check meters for verification of energy purchased through GRIDCo. In
addition to this, Distribution Transformer (DT) metering were added to check the consumption at
various distribution point. ECG has also instituted mechanisms and systems to adequately account

for all the energy that is purchased including joint meter readings at the generation point of Power
Plants.
ECG is in the process of deploying an upstream software to enhance monitoring of ECG’s

contracted Power Plants and the Transmission Network. ECG has currently widened the reach of
secondary (Distribution) transformer metering across its operational areas and added feeder
metering to properly account for energy sales and the potential high loss in the distribution
network. With the distribution transformer metering together with its associated software system,
areas of high losses could easily be identified and necessary interventions provided to address the
loss levels in the distribution system. Current activities geared towards improving energy
accounting include:
▪ Rerouting of concealed service tails.

• Survey to identify any unmetered company premises including substation service loads.
• Continuous regularization of unauthorized connections and simplifying procedures for the
provision of new service connections to consumers.
• Regular mapping and capturing of SHEP meters under the Commercial Loss Reduction Task
Force to account for energy consumed under the government SHEP projects.
• Monitor the status of work done and update metering status on the Primary Substations.
• Installation of meters at the Primary Substation in Tema region commenced in January 2021
with a total of fifty-six (56) energy meters installed.
• A total of 6,787 Distribution Transformer meters have been installed as at the end of December
2021 at the LV side of (11/0.415kV) or (33/0.415kV) distribution transformers.
• Installation of boundary meters in all regions and selected Districts are ongoing.
5.3 Theft of Power, Cables and Equipment

Power theft has been a serious issue to be handled by the company as it has resulted in huge loss
of revenue to ECG over the years. Although the company has been taking several measures to curb
the situation, much remains to be done as culprits continue to indulge in illegal connections.
Some of the initiatives taken to deal with illegal connections includes the auditing of large
customers (monthly consumption of 1,000KWh and above) meter installations or connections;
auditing of meter installations or connections in concentrated and scattered areas; attending to
informant referrals; and auditing of payment systems and vending platforms to address system
abuses and fraud.

A total of 157.26 GWh with a corresponding amount of GHS 178.44 million was recovered during
the period 2019 to 2021. Total meters monitored to identify the illegalities within the distribution
network was 572,980, resulting in the identification of 12,416 illegal connections as shown in table
5.3.1.
5.3.1 Theft of Power
Illegal Total Units Total Amount

Meters Anomalies
Year Connections Recovered Recovered (GHS
Monitored Identified
Identified (GWh) Millions)
2019 314,985 3,155 12,512 40.8 46.56

2020 122,288 2,838 7,911 54.38 57.92
2021 135,707 6,423 8,727 62.08 73.96
Total 572,980 12,416 29,150 157.26 178.44
Out of the total number of 12,416 customers that engaged in power theft, 1,047 culprits have been
referred to the legal directorate for prosecution.
In addition to power theft ECG has had to deal with theft of copper from distribution transformers,
utility poles, transformer oil from energised transformers, underground cables, overhead
conductors, etc. These criminal acts have several adverse consequences including the obvious
economic impact, service disruptions and possible danger to ECG personnel, the public and
persons involved in the theft.
The following measures to mitigate the impacts of theft on the company’s operations are being
deployed:
• Working with scrap dealers and law enforcement officials.

• Fencing, warnings signs, adequate lighting of installations, patrolling and intrusion
detection for deterrence.
• Expansion of the Advance Metering Infrastructure (AMI) to remotely monitor the loads
and consumption of high consuming Non-Special Load Tariff (NSLT) for early detection of
theft.
5.4 Loss Control-Technical and Commercial

System losses continues to be a major hurdle for ECG. Though various mechanisms have been put
in place to reduce losses, the company has not been able to achieve the Commission’s benchmark.

The company’s system losses as at the end of 2021 was 29.84%, made up of 10.55% technical losses
and 19.29% commercial losses.
A comprehensive means to tackle system loss reduction by the company has been through the
measurement and determination of the levels of technical and commercial losses as well as
identifying the areas and distribution network levels where the losses occur.
With technical losses, ECG periodically undertakes technical loss study to determine the exact level
of technical losses and where the chunk of the losses occur in the distribution network. Studies
have revealed that more than 50% of the technical losses occur in the low voltage distribution
networks. ECG is therefore putting in place a system to annually measure the level of technical
losses using meters installed in the sub-transmission and distribution networks. This would also
help assess the impact of the various projects undertaken to achieve reduction in technical losses.
ECG has embarked on several projects geared towards system loss reduction across all operational
areas of the company. Some of the projects to reduce technical losses include the upgrade of
under sized conductors; transformer injections to reduce the length of long LV networks;
upgrading of long rural and peri-urban primary distribution feeders from 11 kV to 33 kV; metering of
distribution transformer, sub-transmission and primary distribution feeders for energy accounting.
Prepaid energy meters have also been installed in major theft prone areas. Unmetered premises
are also being metered to measure consumption for billing. Replacements of faulty meters and old
electro-mechanic meters with smart prepayment meters is on course.
Discrepancies in meter reading and metering are also being addressed. ECG would also continue to
supervise third party contractors in the installation of distribution transformer metering, feeder
metering, boundary metering and rerouting of concealed service tails. Customers are also being
linked to distribution transformers to help improve energy accounting.
There is also regular monitoring of meter installations and billing systems to unearth illegalities and
system abuse. To properly account for streetlight consumption, the company counts, captures,
tags and updates streetlight installations across all our operational regions. In addition, all
streetlights will be linked to transformers in the operational districts as part of the energy
accounting process.
5.5 Availability/Reliability of Supply - Quality of Service

The availability and reliability of supply is a key strategic objective to be achieved by ECG in carrying
out its mandate. Although this objective has been achieved at some periods in one way or another,

more action is required to be taken by the company to sustain these gains as discussed under
section 4.2. Some circumstances contributing to low quality of supply include overloaded
networks, third party damages, theft, vegetation overgrowth, etc. Several efforts are underway to
address these challenges.
Additionally, ECG has made considerable investment in network reliability in the last few years,
some of these projects are ongoing (refer to 2.1 projects undertaken). These initiatives have
yielded the desired improvement in network reliability in the specific locations where projects
were undertaken. However, the challenges encountered by other players in the sector such as
generation shortfall and transmission failures are beyond the company’s control and often impact
heavily on the availability and reliability of power supply to our customers.
During the 2019 - 2020 regulatory period, major incidents upstream such as the pigging exercise
carried out by WAGP, disruptions in supply of gas and faults in the NITS compelled the company to
carry out unplanned outages to the inconvenience of customers. Similarly, the recent works being
carried out by GRIDCo has also resulted in power outages which had not been planned by the
company. The company is collaborating with key players in the industry to find appropriate
measures to mitigate such incidents in the future. The company also encountered power outages
in its distribution network which were due to both planned and unplanned outages.
5.6 Suppressed Demand

The phenomenon of suppressed demand is one that makes planning for capital investment very
daunting. This is so because, the assumptions that underpins decisions and costing of capital
projects could be thrown out of gear with the existence of suppressed demand in a distribution
utility’s network. The challenge is how to play the balancing act of arriving at an optimum situation
that would neither result in excessive redundant capacities nor consumption of installed capacities
almost at the time of commissioning.
Within ECG’s operating areas, there is a significant level of suppressed demand. Low voltages
often cause a level of suppressed demand in the distribution network. Suppressed demand cannot
be eliminated but can be minimized. This can be achieved through network expansion, upgrades
and system quality improvements. These involve addition of feeders and distribution transformers
to the distribution networks and undertaking voltage improvement projects.
To effectively address the level of suppressed demand, requires a study to determine the current
level of suppressed demand in the distribution system. The plan for such a study is on hold due to

unavailability of funds. ECG is also considering the introduction of modern mechanisms to help
properly identify rapidly growing centres timeously to help keep pace with customer consumption.
5.7 Management Information System Including E-Payment

The implementation of the Commercial Management System (CMS), Pentaho and the Business
Intelligence (BI) to host all commercial activities and management reports across all ECG
operational areas over the last five years has led to the consolidation of ECG’s reporting
processing. These systems facilitate the extraction of data for analyses for quick management
decisions making. Most of the generic data requirements from our major stakeholders and
regulators are embedded in these systems for easy access and benchmarking.
The major challenges are the unstable network facilities, the huge cost of maintaining the ICT
infrastructure systems and the over dependency on third party telecommunication network
systems. Some of the systems rolled out to enhance our services include the following:
▪ ECG mobile application (ECG Power) developed to enable users with smart prepaid meter or
post-paid meters to purchase credit and make bill payments at their convenience using
handheld devices like the mobile phone. The application also permits customers to track
purchases, payments, and consumption.
▪ ECG web portal for online application of service connections.
▪ Mobility application for remote readings for post-paid customers.
▪ Monthly SMS alert for post-paid bills.
▪ Electronic distribution of post-paid bills (especially for all high consuming customers).
The hustle of having to queue and the difficulty of purchasing credit at odd hours has been
minimised. ECG is also negotiating with the banks to enable customers to make payments with
their debit cards.
5.8 Billing and Collection

ECG has taken steps to shorten the averaged days to billing and delivery of credit bills by
decoupling meter reading from bill delivery. This project has been piloted in Accra regions and
would be rolled over to other regions accordingly.
Customer billing is centralized whiles printing, distribution of bills and revenue collection is
decentralised. As at the end of December 2021, the Company’s customer profile was 1,853 for SLT,
604,505 for non-residential and 3,683,654 representing residential customers.

The new service connections during the last few years were 175,360, 399,138 and 165,732 for 2019,
2020 and 2021 respectively. This was partly attributable to the capturing of SHEP meters across
ECG operational areas to improve billing and collection targets. 99.8% of the new connections were
NSLT while the remaining 0.2% were SLT customers. 64% of the NSLT customers are on prepaid
meters while the remaining 36% are on credit meters.
To improve billing accuracy for high consuming NSLT customers, the automatic meter reading
(AMR) system has been installed for this category of customers. Meter Reading Contractors
undertake readings of customer meters except SLT and NSLT high consuming customers metered
on AMR as these meters are read remotely. The billing accuracy target of 98% was not achieved
due to non-accessibility of meters, high communication failure rates of prepaid meters, illegal
transfer of meters, stolen meters, faulty meters, etc.
ECG’s revenue-sales ratio for private customers were 119%, 84% and 87% for 2019, 2020 and 2021
respectively. The impact of the increase in the new connections during the period (notably in 2020)
was largely minimal due to the low tariff band which majority of these customers belong. Thus, the
128% increase in new connections for 2020 yielded a minimal increase of 8% sales revenue over the
2019 figure.
Generally, revenue collection was negatively impacted by the enforcement of COVID-19 directives
of the company which included non-disconnection of customers especially residential customers,
staff shift system in adherence to social distancing protocols, etc.
Revenue collection is undertaken by the company and third parties. The company has taken
measures to monitor and improve revenue collection in all operational areas such as setting
revenue collection targets for regions, improving billing accuracy, continuation of the deployment
of prepayment meters, etc.
Additionally, the company launched the ECG Power, a mobile application for ease of payment of
credit bills and smart prepaid meters. The mobile application also provides customer consumption
information and balances. As at the end of the first quarter of 2022, the total number of customer
transactions on this platform was 9.29 million with a corresponding amount of GHS436.03 million
signifying customer confidence in the E-payment system as shown in graph 5.

Graph 5 E-Payment System - ECG Power (ECG Mobile App)
5.9 Organisational Reform & Restructuring

The ECG-PSP era led to the creation of two companies mainly Re-structured ECG and Power
Distribution Services (PDS). However, at the termination of the PSP, the two companies merged
resulting in the reform of ECG’s organisational structure. With the reform, two new directorates
namely Energy Trading and Energy Consulting and Telco Business were added to the company’s
organisational structure.
To improve ECG’s communication activities, the company recently found it necessary to upgrade
its Public Relations division to a directorate called the Communications directorate. This brings to
three (3), the number of new directorates added to the company’s existing structure during the
last regulatory period.
5.10 Customer Complaints & Dispute Resolution

The Customer Satisfaction Index (CSI) recorded for 2019 was 63.05% as against the industry’s
benchmark rate ranging from 70% to 75%. The quality of service over the last three years has
improved significantly due to the various social media channels made available to customers as
well as the quick response time from our outsourced call centres. Due to the COVID-19 pandemic,
the study on CSI could not be carried out in 2020. The CSI recorded in 2021 was 63.80%. ECG’s
Strategy document (2021-2024) projects a CSI of 70% which is dependent on the quality of services
offered.
The company has taken measures to improve the quality and level of service delivery rendered to
its cherished customers. Some of the initiatives taken to improve customer complaints and dispute
resolution include:

▪ To build, maintain and manage a healthy relationship with our SLT and Strategic Important
Customers (SICs) for 100% retention.
▪ To provide an exclusive business environment and lounges for our SLT (SIC) customers.
▪ To deploy mystery shoppers to help identify staff misconduct including extortions from
customers.
▪ Multilingual IVR system is also operational with Chart room to enhance our social media
platform.
5.11 Resolution of Court Cases

Court Case involving ECG are mainly related to unpaid electricity bills, disputed bills, wrongful
disconnection, right of way issues, etc.
Currently, there are at least 100 cases before the court in all ECG operational areas for the recovery
of monies from customers who have failed, refused, or neglected to settle their indebtedness to
the company. Cases involving disputed bills and other matters involving aggrieved customers are
about twelve (12) in number. There are also about eleven (11) cases related to right of way and land
issues. These cases are currently on-going and have not been closed or resolved.
The setting up of utility court in 2011 to prosecute cases involving electricity theft has also helped
deter customers from engaging in such activities.
5.12 Government and Public Sector Debts

Overall, it is undeniable that government recently made some payments to defray its MDAs,
streetlighting shortfalls, lifeline subsidies and GWCL debts. However, the full amount granted as
COVID-19 relief by the government is yet to be settled. It is expected that the Government will
continue to honour its debt obligations to keep ECG afloat.
Governments indebtedness to ECG in the last few years were GHS1.015 billion, GHS1.375 and
GHS1.840 billion in 2019, 2020 and 2021 respectively. The components of Government bills are
MDAs, GWCL, Subsidies, Streetlight shortfall, Utility Relief granted to all customers from July 2016
to June 2019 and Covid-19 Relief. Government indebtedness to ECG was offset with payments
made by the Ministry of Finance (MoF) to Fuel Suppliers, VRA and IPP’s. The Cross Debt Clearing
House (CDCH) agreed position in 2009 was used as the opening balance for rolling-over bills and
payments to arrive at the Net Debt Position yearly. Over the years, Government has made the
following payments on behalf of ECG:

▪ In 2019, Government paid a total amount of GHS4,592.29 million out of which an amount of
GHS1,840.88 million was paid to fuel suppliers and GHS2,751.41 million to IPPs.
The various Government payments were reconciled with stakeholders in the electricity value chain
and applied to reduce Government indebtedness. The total amount paid by Government under this
arrangement was more than Government’s indebtedness and the balance was treated accordingly
as Other Government Equity.
5.13 Bad & Doubtful Debts

Over the past 10 years no bad debt has been approved by the Board even though the necessary
provisions were made in the budgets. The total provision for bad and doubtful debts increased
year on year in the last few years. These were GHS58.51 million, GHS276.50 million and an
estimated GHS290.33 million for 2019, 2020 and 2021 respectively. This is based on the company
policy on provision for bad and doubtful debts.
The unrecoverable debt comprises of debt due to demolished structures, debt examined under the
ECG’s debt recovery process and fixed charge debt due to long periods of disconnection. Majority
of these bad debt emanates from demolished structures due to road constructions, relocation of
slums, removal of temporary structures, illegal transfer and removal of meters by unscrupulous
customers (mostly SHEP areas).
ECG regularly engages Districts and Municipal Assemblies to ensure that information on
demolishing exercises, road constructions, etc. are communicated to ECG in good time to avoid
this problem.
5.14 Surcharge & Subsidies

Largely, subsidies expected to be paid by the Government on behalf of subsidized customers are
always in arears thereby negatively affecting the financial health of the company. The total lifeline
subsidy for 2019, 2020 and 2021 were GHS33.16 million, GHS55.05 million and GHS82.42
respectively. The total power factor surcharge for 2019, 2020 and 2021 were also GHS16.65 million,
GHS18.61 million and GHS20.24 respectively.

5.15 Government Grants

During the period under review, the company did not directly receive government grants.
5.16 Access to Finance and Repayment of Financing Costs

Until recently, ECG’s main external financing came from Government subsidiary loans. Other
external financing included contracted loans from the following: Chirano facility, Western Diamond
loan, MoF/Calbank loan and BXC facility. In 2020, ECG further contracted a commercial loan of
GHS600 million from Financial Institutions to improve service delivery and purchase prepayment
meters. Currently, these loans are being serviced from tariff revenues.
5.17 Tariff Structure and Rates Design

The current tariff structure and rate design inhibits ease of implementation and customer
understanding due to the multiple bands and progressive rates. Other characteristics of the
current tariff structure include its discriminatory or cross-subsidisation nature causing distortions
in pricing signals to some category of customers as well as displeasure among SLT customers. It
also excludes a streetlight tariff which has become a concern to be addressed in a new tariff
structure.
Rate Design: Rate design could be simplified, easy to implement and easily understood by
customers by removing the several Increasing Block Tariffs (IBT) for NSLT customers (residential
and non-residential) and replace it with just two tariff blocks as explained below.
▪ Residential (Group A) - First tariff block is seen as a mitigating measure of affordability which
must be maintained. That is a lifeline tariff exclusively applicable to residential low-income
earners with consumption of 0-50 kWh per month.
▪ Residential (Group B) - Second tariff block would be applicable to all other residential
customers who may be referred to as non-lifeline customers.
▪ Non-Residential (Group A) - First tariff block would be a lower tariff applicable to non-
residential (commercial) low consumption customers. This requires a defined threshold in
terms of kWh for this category of customers.
▪ Non-Residential (Group B) - Second tariff block would be applicable to non-residential

customers outside the defined threshold.
The existence of lifeline tariff results in cross-subsidization between tariff categories with the
greatest adverse impact on SLT customers which consequently affects ECG’s ability to retain these

SLT customers. However, it appears to be difficult to practically eliminate all cross-subsidies and
therefore a gradual process could begin now.
Tariff Structure: The concept of customer categories has a very relevant impact on tariff structure.
Ideally, customer categories depict the electricity usage and corresponding cost level of specific
group category. The current categories include residential, non-residential (commercial), industrial
LV, industrial MV, industrial HV and HV mines. This however excludes streetlight and as such
streetlight is being proposed to be considered in the tariff groups.
A study by Ministry of Energy (MoEn) shows that streetlight consumption is about 6% of total ECG
sales. It is important to determine its corresponding charge or cost by applying the appropriate
tariff indicated in the tariff groups. Currently, public light levies constitute just 30% of the cost of
streetlight consumption. The estimated annual consumption for streetlight is 534.65GWh. The
equivalent cost of this energy consumption applying the current EUT is about GHS468.38 million.
Using the rate for public lighting levies which ECG retains 60% this would translate into about
GHS140.51 million. The shortfall therefore is about GHS327.87 million. The question then is, which
is the appropriate tariff to apply in determining the cost of streetlight consumption? Therefore, the
introduction of streetlight tariffs in the tariff structure is imperative as it would help to fully
account for the cost of streetlight consumption.
The last regulatory period also saw changes to the components of the tariff structure by the
removal of maximum demand charge. A restoration of this charge at a considerable rate would
help ECG recover some fixed cost that are unrelated to energy consumption without burdening
customers.
Elsewhere, time-of-use electricity tariffs are applied in a tariff structure. However, giving ECG’s
current metering devices, it does not seem appropriate to introduce time-of-use electricity tariffs
in the tariff structure for now. In the near future, time discriminating tariffs (such as time-of-day
tariffs) may be considered when ECG can install systems and metering equipment that support the
required time discrimination.
5.18 Introduction of Wholesale Electricity Market

The implementation of the Wholesale Electricity Market (WEM) is expected to be fully rolled out
by April 2023. This implies that the Energy & Capacity Markets, Ancillary Services Market and
Settlement activities shall be in place by this date. Currently, the Energy Market is partially under
implementation whilst ECG looks forward to the implementation of Ancillary Service and Capacity
Markets as well as the related settlement which are mandatory components of the WEM.

A key point is the effect of bilateral contracts on Dispatch which sometimes creates revenue gaps
due to the dispatch of plants which have not been contracted by parties but in some instances
offer a technically feasible operation of the NITS. In such instances, contracting parties may be left
with capacity payments to honour because its contracted plants may not be dispatched in favour
of other plants.
Additionally, the lapses in the Grid Code which ECG had recommended for review include a relook
at the variable cost as a basis for Merit Order Dispatch of power plants. This is because in a
situation where capacity charges are not set within similar values, the use of variable cost to
prioritize dispatch operation may be flawed. Therefore, in a situation where capacity charges are
varied, it is recommended that a multiple use of variable cost, fixed cost and total charge should
form the basis for merit order dispatch. This would imply that plants which have very low capacity
charges but operate in simple cycle mode will have a fair level of dispatch because their total
charge may be one of the lowest in the sector. ECG wishes to bring this to the attention of the
regulators on the way forward.
▪ Procurement of Online Monitoring Software: In preparation towards the implementation of

the WEM, ECG is currently arranging to procure an online monitoring software to monitor
particularly upstream activities of the Power Sector. This is to ensure that efficiency and
transparency is achieved in the procurement, transmission and receipt of power at the ECG
Bulk Supply Points (BSPs). This would help ECG to obtain information for the review of
invoices and monitoring of PPAs timeously. The online monitoring system is being designed to
provide ECG with access to its contracted plants and NITS. This is envisaged to bring significant
savings to ECG.
▪ Reporting Requirements: Under the WEM, GRIDCo is required to provide ECG with detailed
information and data on all incidences that may occur on the transmission grid. An agreed
detailed reporting format has been sent to GRIDCo and discussed with regulators and EMOP.
Energy Commission has adopted same format in its correspondence to GRIDCo and other
stakeholders. ECG currently awaits GRIDCo to provide such information as and when
incidences occur.
▪ Stranded Assets & Captive Generation: The issue of stranded assets & Captive generation
continues to be a concern to ECG in view of WEM. This is because the reduction of the
threshold for bulk consumers (now 500kVA and above) by the Energy Commission has
compelled SLT customers (who subsidise other consumer categories in the tariff structure) to

flee. Therefore, the usual behaviour of customers to explore cheaper options of electricity
(close substitutes) would worsen ECG’s revenue position. Currently, captive generators who
are largely not regulated can supply these customers, denying the utility of critical revenue.
ECG recommends the provision to recover the cost of stranded asset in the pricing of electricity
considering the threshold for bulk customers. Additionally, the provision of rules and guidelines for
captive generators is imperative for the sector.
5.19 Wholesale Market Bulk Customers Embedded in Distribution Network

As Ghana is working towards implementing the WEM, the issue of bulk customers and the
applicable tariff to specific industries will require major attention. Currently, ECG has twenty-eight
(28) BCs who may negotiate their own tariff. The move to WEM will mean major activity in this
regard and customers will be exploring this aspect of the power industry. For this proposal, ECG
wishes to present its current list of bulk customers with their forecasted Demand & Energy
Consumptions as well as the expected revenue for the tariff period. The tables, 5.19.1a and 5.19.1b
present the detailed data on ECG’s expectation of revenues from bulk customers.

5.19.1a Wholesale Market Bulk Customers Embedded in Distribution Network

PROJECTION FOR BULK CUSTOMER ENERGY AND DEMAND 2022 - 2026
2021 (Actual) 2022 2023
No. Name Of Customer Projected Projected

Total Charge/ Total Charge/ Total Charge/
Total kWh Max. kVA Total kWh Max. Total kWh Max.
GHS GHS GHS
Demand/ kVA Demand/ kVA
Steel Companies
1 B5 Plus Company Ltd 112,495,206 22,705 60,263,682 120,369,871 24,294 64,482,140 128,795,762 25,995 68,995,890
2 Fabrimetal Ghana Limited 71,169,206 14,169 38,125,344 76,151,050 15,161 40,794,118 81,481,624 16,222 43,649,706
3 Ferro Fabric Manufacturing 84,119,815 16,639 45,062,985 90,008,202 17,804 48,217,394 96,308,776 19,050 51,592,611
4 Sentuo Steel Ltd 125,434,300 42,153 67,195,155 134,214,701 45,104 71,898,815 143,609,730 48,261 76,931,732
5 Tema Steel Company 28,960,083 14,742 15,513,917 30,987,289 15,774 16,599,891 33,156,399 16,878 17,761,883
6 West African Forgings Ltd. 14,698,834 6,866 7,874,165 15,727,752 7,347 8,425,357 16,828,695 7,861 9,015,132
7 Star Steel Company Ltd 44,156,360 12,270 23,654,562 47,247,305 13,129 25,310,381 50,554,617 14,048 27,082,108
8 RGJB Plus Steel Ltd (Ghana Steels) 5,244,741 1,298 2,809,608 5,611,873 1,389 3,006,280 6,004,704 1,486 3,216,720
9 Rider Iron & Steel Ghana Limited 1,136,811 6,356 608,990 1,216,388 6,801 651,619 1,301,535 7,277 697,232
SUB - TOTAL FOR STEEL COMPANIES 487,415,357 119,363 261,108,407 521,534,432 127,718 279,385,995 558,041,842 136,658 298,943,015
Mining Companies
10 Chirano Gold Mines Ltd 140,660,143 22,586 98,462,100 150,506,353 24,167 112,879,765 161,041,798 25,858 128,833,438
11 GMC 6,380,780 1,556 5,742,702 6,827,435 1,665 6,144,691 7,305,355 1,781 6,574,820
Anglogold Ashanti Iduapriem - -
SUB-TOTAL FOR MINING COMPANIES 147,040,923 21,003 104,204,802 157,333,788 22,473 119,024,456 168,347,153 24,047 135,408,258
- -
Manufacturing Companies - -
12 Olam Ghana Ltd 19,620,780 3,133 14,952,015 20,994,235 3,352 15,115,849 22,463,831 3,587 17,072,512
13 Sentuo Ceramics 35,373,800 6,712 25,469,136 37,849,966 7,181 27,251,976 40,499,464 7,684 30,779,592
14 Nixin Paper Mill Ghana Ltd 20,656,421 4,600 12,393,853 22,102,370 4,922 14,587,565 23,649,536 5,266 16,554,675
15 Sunda Ghana Limited ( Group Incl. Homepro) 15,806,992 3,476 9,484,195 16,913,481 3,720 11,162,898 18,097,425 3,980 12,668,198
16 Printex Ltd 7,991,488 1,420 5,753,871 8,550,892 1,520 6,156,642 9,149,455 1,626 6,953,586
17 Kablemetal Manufacturing (Nexans) 2,206,784 1,142 1,588,884 2,361,259 1,222 1,700,106 2,526,547 1,307 1,920,176
18 Kasapreko Company Ltd (Royal Crown Packaging) 1,465,824 771 1,055,393 1,568,432 825 1,129,271 1,678,222 883 1,275,449
SUB-TOTAL FOR MANUFACTURING COMPANIES 103,122,089 18,491 70,697,348 110,340,635 19,785 77,104,306 118,064,480 21,170 87,224,187
Cement Companies -
19 Ghacem Ltd (Tema) 83,228,644 14,842 63,253,769 89,054,649 15,881 67,681,533 95,288,475 16,993 76,230,780
20 Ghacem Ltd (Western) 60,003,425 20,598 45,602,603 64,203,665 22,040 48,794,785 68,697,922 23,583 54,958,337
21 DIAMOND CEMENT/Western Diamond 21,125,800 6,085 16,055,608 22,604,606 6,511 17,179,501 24,186,928 6,966 19,349,543
22 Unicem Cement Gh.LTD. _AMOAFO DETIEM 13,272,325 2,549 10,086,967 14,201,388 2,728 10,793,055 15,195,485 2,918 12,156,388
23 Green View (Dangote Cement) 1,900,374 862 1,444,285 2,033,401 922 1,545,384 2,175,739 987 1,740,591
24 WAN HENG GH LTD (Sol Cement) 28,416,189 5,577 21,596,304 30,405,322 5,967 23,108,045 32,533,695 6,385 26,026,956
SUB-TOTAL FOR CEMENT COMPANIES 207,946,758 43,946 158,039,536 222,503,031 47,022 169,102,303 238,078,243 50,314 190,462,594
-
Food and Beverages Company -
25 Kasapreko 1 6,872,900 1,553 5,085,946 7,354,003 1,662 5,441,962 7,868,783 1,778 6,137,651
26 Pioneer Food Cannery Ltd 9,301,830 2,259 6,883,354 9,952,958 2,417 7,365,189 10,649,665 2,587 8,306,739
27 Nestle Ghana Limited 16,966,740 2,708 11,876,718 18,154,412 2,897 13,434,265 19,425,220 3,100 15,151,672
28 Fan Milk Ltd Accra 18,249,890 3,199 13,139,921 19,527,382 3,423 14,450,263 20,894,299 3,662 16,297,553
SUB-TOTAL FOR BEVERAGE COMPANIES 51,391,360 8,456 36,985,939 54,988,755 9,047 40,691,679 58,837,968 9,681 45,893,615
GRAND TOTAL 996,916,487 211,258 631,036,032 1,066,700,641 226,046 685,308,740 1,141,369,686 241,870 757,931,669

5.19.1b Wholesale Market Bulk Customers Embedded in Distribution Network

PROJECTION FOR OF BULK CUSTOMER ENERGY AND DEMAND 2022 - 2026
2024 2025 2026
No. Name Of Customer Projected Projected Projected

Total Charge/ Total Charge/ Total Charge/
Total kWh Max. Total kWh Max. Total kWh Max.
GHS GHS GHS
Demand/ kVA Demand/ kVA Demand/ kVA
Steel Companies
1 B5 Plus Company Ltd 137,811,465 27,815 73,825,602 147,458,268 29,762 78,993,394 157,780,346 31,845 84,522,932
2 Fabrimetal Ghana Limited 87,185,338 17,358 46,705,185 93,288,311 18,573 49,974,548 99,818,493 19,873 53,472,767
3 Ferro Fabric Manufacturing 103,050,391 20,384 55,204,094 110,263,918 21,811 59,068,381 117,982,392 23,338 63,203,168
4 Sentuo Steel Ltd 153,662,411 51,640 82,316,954 164,418,780 55,254 88,079,140 175,928,095 59,122 94,244,680
5 Tema Steel Company 35,477,347 18,059 19,005,215 37,960,761 19,323 20,335,580 40,618,015 20,676 21,759,071
6 West African Forgings Ltd. 18,006,704 8,411 9,646,191 19,267,173 9,000 10,321,425 20,615,875 9,630 11,043,924
7 Star Steel Company Ltd 54,093,440 15,031 28,977,856 57,879,981 16,083 31,006,306 61,931,579 17,209 33,176,747
8 RGJB Plus Steel Ltd (Ghana Steels) 6,425,033 1,590 3,441,890 6,874,786 1,701 3,682,823 7,356,021 1,821 3,940,620
9 Rider Iron & Steel Ghana Limited 1,392,642 7,786 746,038 1,490,127 8,331 798,261 1,594,436 8,914 854,139
SUB - TOTAL FOR STEEL COMPANIES 597,104,771 146,225 319,869,026 638,902,105 156,460 342,259,858 683,625,252 167,413 366,218,048
Mining Companies
10 Chirano Gold Mines Ltd 172,314,724 27,668 146,467,515 184,376,755 29,605 165,939,079 197,283,127 31,677 177,554,815
11 GMC 7,816,730 1,906 7,035,057 8,363,901 2,040 7,527,511 8,949,374 2,182 8,054,437
Anglogold Ashanti Iduapriem
SUB-TOTAL FOR MINING COMPANIES 180,131,454 25,730 153,502,572 192,740,656 27,531 173,466,590 206,232,501 29,458 185,609,251
Manufacturing Companies
12 Olam Ghana Ltd 24,036,299 3,838 18,267,587 25,718,840 4,107 20,575,072 27,519,159 4,394 23,391,285
13 Sentuo Ceramics 43,334,426 8,222 32,934,164 46,367,836 8,798 37,094,269 49,613,584 9,413 42,171,547
14 Nixin Paper Mill Ghana Ltd 25,305,004 5,635 18,978,753 27,076,354 6,029 21,661,083 28,971,699 6,451 24,625,944
15 Sunda Ghana Limited ( Group Incl. Homepro) 19,364,245 4,259 14,523,184 20,719,742 4,557 16,575,794 22,170,124 4,876 18,844,605
16 Printex Ltd 9,789,917 1,740 7,440,337 10,475,211 1,862 8,380,169 11,208,475 1,992 9,527,204
17 Kablemetal Manufacturing (Nexans) 2,703,405 1,399 2,054,588 2,892,644 1,497 2,314,115 3,095,129 1,602 2,630,859
18 Kasapreko Company Ltd (Royal Crown Packaging) 1,795,697 945 1,364,730 1,921,396 1,011 1,537,117 2,055,894 1,081 1,747,510
SUB-TOTAL FOR MANUFACTURING COMPANIES 126,328,993 22,652 95,563,342 135,172,023 24,238 108,137,618 144,634,065 25,934 122,938,955
Cement Companies
19 Ghacem Ltd (Tema) 101,958,668 18,182 81,078,368 109,095,774 19,455 86,753,795 116,732,479 20,817 92,826,502
20 Ghacem Ltd (Western) 73,506,776 25,233 58,453,424 78,652,250 27,000 62,545,105 84,157,908 28,890 66,923,204
21 DIAMOND CEMENT/Western Diamond 25,880,013 7,454 21,600,294 27,691,614 7,976 23,112,257 29,630,027 8,534 24,730,056
22 Unicem Cement Gh.LTD. _AMOAFO DETIEM 16,259,169 3,123 12,930,126 17,397,311 3,341 13,835,177 18,615,122 3,575 14,803,581
23 Green View (Dangote Cement) 2,328,040 1,056 1,852,093 2,491,003 1,130 1,981,681 2,665,373 1,209 2,120,340
24 WAN HENG GH LTD (Sol Cement) 34,811,053 6,832 29,054,140 37,247,827 7,310 31,087,872 39,855,175 7,822 33,263,964
SUB-TOTAL FOR CEMENT COMPANIES 254,743,720 53,836 204,968,445 272,575,780 57,604 219,315,886 291,656,085 61,636 234,667,647
Food and Beverages Company
25 Kasapreko 1 8,419,598 1,903 6,567,286 9,008,970 2,036 7,387,355 9,639,598 2,179 8,482,846
26 Pioneer Food Cannery Ltd 11,395,142 2,768 8,888,211 12,192,802 2,962 9,998,097 13,046,298 3,169 11,480,742
27 Nestle Ghana Limited 20,784,986 3,317 16,212,289 22,239,935 3,549 18,236,747 23,796,730 3,798 20,941,123
28 Fan Milk Ltd Accra 22,356,900 3,919 17,438,382 23,921,883 4,193 19,615,944 25,596,415 4,486 22,524,845
SUB-TOTAL FOR BEVERAGE COMPANIES 62,956,626 10,358 49,106,168 67,363,589 11,084 55,238,143 72,079,041 11,859 63,429,556
GRAND TOTAL 1,221,265,564 258,801 823,009,554 1,306,754,153 276,917 898,418,095 1,398,226,944 296,301 972,863,456
5.20 Embedded Generators and Interconnection

ECG currently has four operational renewable energy power plants which are directly connected to
the distribution grid. These are:
a. 20MW BXC solar farm at Gomoa Onyeadze in the Central Region
b. 20MW Meinergy Solar Farm at Winneba in the Central Region
c. 0.1MW Safisana Biowaste facility at Ashaiman in the Greater Accra Region.
d. 0.03MW Tsatsadu Mini-Hydro Power plant at Tsatsadu in the Volta Region, which is also
owned by the Bui Power Authority

5.20.1 Embedded Generators and Interconnection
Energy (GWh)
Capacity
Name of Plant Comments
(MW)
2022 2023 2024 2025 2026
BXC Ghana Limited 20 36.5 36.5 36.5 36.5 36.5 PPA operational
Meinergy Technology
20 36.5 36.5 36.5 36.5 36.5 PPA operational
Limited
Safisana Company
0.1 0.69 0.69 0.69 0.69 0.69 PPA operational
Limited
Capacity and output of plant is
Tsatsadu Mini-Hydro
0.03 0.29 0.29 0.29 0.29 0.29 included in the Bui PPA and has
Power Plant
the same tariff
5.21 Power Procurement from Independent Power Producers and Renewable Energy
Generators
Power procurement is in the interest of Power Quality (Voltage, frequency Control, etc) and supply
security of the sector. ECG has factored in the generation plan, provisions for reserve margin as
determined by the system operator (GRIDCo) and ratified by the EMOP for consideration by the
Commission.
5.21.1 Projected Annual Energy Dispatch of Power Plants (2022-2026)
Tested Projected Annual Energy (GWh)

Name of Plant Capacity Comments
MW 2022 2023 2024 2025 2026
Tapco 330 135 135 135 135 135
Sunon Asogli I 200 1,077 1,077 1,077 1,077 1,077
Sunon Asogli II 360 2,100 2100 2100 2100 2100
Bui Hydro Power 200 1030 1030 1030 1030 1030
Cenit Energy 110 0 0 0 0 0

Karpowership Ghana
450 1,714 2,841 3,863 3,863 3,863
Company Limited
ECG awaits PURC determination on
AKSA Enerji 332 0 0 0 0 0
issue of CPI, fuel transport charge etc.
Cenpower Generation
325 2,847 2,847 2,847 2,847 2,847
Company Limited
Amandi Energy 202 1,752 1,752 1,752 1,752 1,752
Early Power Limited 410 0 0 190 1,493 2,893 COD expected by June, 2023

5.21.2 Projected Reserve Margin (18%) for Power Plants (2022-2026)
Projected Annual Energy (GWh)

Name of Plant
2022 2023 2024 2025 2026
Karpowership Ghana
2,149 1,022 0 0 0
Company Limited
Early Power Limited 963 1,699 3,314 2,011 611
Cenit 0 546 70 964 964
AKSA 0 0 0 0 0
5.21.3 Projected Idle Capacity for Contracted Power Plants (2022-2026)
Projected Annual Energy (GWh)

Name of Plant
2022 2023 2024 2025 2026
Early Power Limited 285 0 0 0 0
Cenit 964 418 893 0 0
AKSA 2,891 2,891 2,409 0 0
ECG recommends that government extends a hand of support in the financing of the cost of
excess capacity as it is not considered in the tariff. The company hopes that the decision by
government to create the Delta Fund through the Ministry of Finance (MoF) to cater for this cost
would be a reality. However, reserve margin needs to be recovered through the tariff due to its
relevance to the entire sector. The estimated cost for both the 18% reserve margin and idle capacity
for the regulatory period is about USD 1,131.18 billion as shown in the table below.
5.21.4 Cost of Reserve Margin and Idle Capacity (2022-2026)
Cost of Reserve Margin (18%) and Idle Capacity
Item 2022 2023 2024 2025 2026 Total
Reserve Margin 185.21 161.02 155.24 120.00 55.17 676.65
Idle Capacity 172.97 145.11 136.46 0.00 0.00 454.54
Total Cost (USD Million) 358.18 306.13 291.69 120.00 55.17 1131.18

5.22 Human Resource-Skilled Manpower

The employee strength increased by 1.04% from 2018 to 2019, however there was a reduction in
staff strength of 0.17% and 0.44% for 2020 and 2021 respectively with the total staff strength of
6,383 at the end of December 2021. The deployment of the Performance Management System
(PMS) by ECG has helped to identify issues on staff strength with its associated capacity building
needs.
The ongoing development of ECG work processes would help to properly align job functions with
current upgrades of employee qualifications. Although recruitment in specific fields is required,
ECG is forced to temporarily put a hold on recruitment until the exercise is completed.
A current study to determine the company’s Average Aggregate of Percentage Readiness (AAPR)
of staff to achieve corporate objectives showed that AAPR was approximately 77%. This figure is
expected to improve after implementation of appropriate interventions. Consequently, ECG
intends to adopt the Human Capital Readiness Index (HCRI) approach to identify appropriate
intervention programmes for employee skill development. Such intervention programmes may
include capacity building, employee motivation, managing change and improving accountability
among staff.
6 Strategies to Address Key Challenges

Some of the strategies adopted by ECG to address some of challenges discussed are as follows;
• Deployment of VIT feeder automation technology on all overhead feeders starting with the
most tripped.
• Deployment of drones for network inspection.
• Deployment of OMS, GIS technologies to improve operations.
• Deployment of live line technologies for network operations.
• Technical inspection of the network in all Regions and Districts with focus on identification
and replacement of defective insulators on frequently tripping feeders.
• Intensive vegetation control is ongoing in all Regions and Districts.
• Strict adherence to planned maintenance activities in order to reduce outage periods.
• Creation of redundancy for system flexibility in the network.
• Provision of construction materials to undertake load balancing and system improvement
• Employment of staff and acquisition of vehicles to execute the maintenance charts.
• Training of contractors to improve workmanship.
• Replacement and repair of faulty test vans.

• Provision of stable internet and communication network.

• Availability of critical materials.
• Installation of AMR meters for high consuming residential and commercial customers to
improve billing accuracy, subsequently improving customer satisfaction and revenue
collection.
• Intensification of customer education on the use of E-payment. ie ECG Mobile App (ECG
Power).
7 Total Distribution Utility System Load at Peak

The peak demand of ECG keeps on increasing year on year. For the year 2022, the ECG’s peak
demand is projected to be 2,269 MW. By the end of the tariff period in 2026, the peak demand is
projected to be 2,617.30 MW. The Cumulative Annual Growth Rate (CAGR) for peak demand for the
5-year tariff period is estimated to be 2.90%. This requires sustained investment in the distribution
network to ensure reliable and quality supply for customers in the ECG distribution system.
8 Regulated Market Customers

Majority of ECG customers are managed within the industry’s regulated market to ensure industrial
harmony. To maintain and grow our customer profile, customer service staff are continually being
trained in areas of shared attitudes, values, goals, and practices to achieve excellent customer
service delivery. As of December 2021, total active customers stood at 4.29 million.
8.1 Regulated Market - Non-Special Load Tariff Customers

Total active NSLT customer population was 2.0 million for credit customers and 2.29 million for
Prepayment customers as at the end of December 2021.
8.2 Regulated Market - Special Load Tariff Customers

Total Special Load Tariff (SLT) customer population was 1,853 as at December 2021. To retain all the
SLT customers, pragmatic steps have been taken to meet their expectation. Our efforts to
maintain these categories of customers are under serious threat since the Energy Commission
started certifying bulk customers, allowing them to purchase directly from other suppliers.
9 Deregulated Market-Energy Commission Licensed Bulk Customers Embedded in the

Network
Due to the lowering (now 500kVA) of the threshold for acquisition of Bulk Customer License by
Energy Commission, several prime customers have gone ahead to secure Bulk Customer Licenses

accordingly. These customers have subsequently written to ECG requesting for negotiations of
their tariffs. The increase in hydro allocation to ECG by the commission in the last quarter of 2020 is
not lost on ECG but that increment was done with some few steel companies in mind.
ECG implores the Commission to review the hydro Allocation to ECG to cushion us from this influx
of prospective negotiated tariff customers.
10 Base Load
ECG contributes significantly to the base load of Ghana. However, GRIDCo has the overview of the
electricity sector to determine the base load of the entire electricity grid. On its part, ECG has
engaged various IPPs to supply the peak demand projections for the company’s customers.
11 Forecast of Energy to be Purchased
The forecasted energy purchases as well as the projected sales and system losses for the tariff
period (2022 – 2026) are shown in table 11.1. In the tariff computation, the base case scenario was
adopted.
11.1 Electricity Demand Forecast (2022 - 2026)
Scenario Category Units 2022 2023 2024 2025 2026
Total Sales GWh 10,322.52 10,566.14 11,047.06 11,352.13 11,631.03

Total Purchases GWh 13,547.44 13,712.94 14,135.72 14,369.79 14,538.78
Low System Losses GWh 3,224.92 3,146.80 3,088.65 3,017.66 2,907.76
System Losses % 23.8 22.95 21.85 21.00 20.00
Peak Load MW 2,155.31 2,224.61 2,264.42 2,260.73 2,320.35
Total Sales GWh 10,985.75 11,942.26 13,020.54 14,149.03 15,402.42
Base System Losses GWh 3,432.12 3,556.64 3,640.42 3,761.14 3,850.61
System Losses % 23.8 22.95 21.85 21.00 20.00
Peak Load MW 2,269.00 2,381.94 2,466.48 2,505.57 2,617.30
Total Sales GWh 11,823.29 12,688.33 13,925.59 15,034.23 16,193.49
High System Losses GWh 3,693.78 3,778.83 3,893.46 3,996.44 4,048.37
System Losses % 23.8 22.95 21.85 21.00 20.00
Peak Load MW 2,466.63 2,669.10 2,851.73 2,990.69 3,226.38

11.2 Non-Conventional Energy - Renewable Energy (GWh)

Renewable Energy 2022 2023 2024 2025 2026
Hydro<100MW 0.29 0.29 0.29 0.29 0.29
Waste to Energy
Biomass 0.69 0.69 0.69 0.69 0.69
Wind
Solar 73 73 73 73 73
Wave
TOTAL 73.98 73.98 73.98 73.98 73.98
12 Distribution System Losses at Various Voltage Levels

The company’s system losses figure as at the end of 2021 was 29.84%. This is made up of 10.55%
technical losses and 19.29% commercial losses. Table 12.1 below shows the target distribution
system losses at the various voltage levels in ECG. Various measures and projects are planned to
achieve these targeted loss reductions by the company.
12.1 Distribution system losses at the various voltage levels in ECG

Voltage Levels 2022 2023 2024 2025 2026
34.5kV-11.5kV N/A N/A N/A N/A N/A

8.91 8.59 8.18 7.86 7.49
33kV-11kV
14.89 14.36 13.67 13.14 12.51
415V-240V
13 Customer Population by Classification
Category 2022 2023 2024 2025 2026
Active Customers 4,425,373 4,646,642 4,878,974 5,122,923 5,379,069
Non-active Customers 504,149 514,232 524,516 535,007 545,707
Total 4,929,522 5,160,874 5,403,490 5,657,929 5,924,776
13.1 Regulated Market Customers
13.1.1 Residential Customers
Category 2022 2023 2024 2025 2026
Lifeline 922,528 792,464 657,247 524,771 403,143
Medium 2,000,263 1,961,237 1,856,619 1,692,026 1,483,678
High 872,135 1,218,356 1,643,290 2,133,762 2,665,792
Total 3,794,925 3,972,057 4,157,156 4,350,559 4,552,613

NB: These are active customer numbers
13.1.2 Non-Residential Customers
Category 2022 2023 2024 2025 2026

Non-Residential 628,347 672,332 719,395 769,753 823,635
13.1.3 Special Load Tariff Customers

Category 2022 2023 2024 2025 2026
SLT-LV 1,099 1,143 1,189 1,236 1,286
SLT-MV 674 748 830 922 1,023
SLT-HV 196 232 273 323 381
Total 1,969 2,123 2,292 2,481 2,690
13.2 Deregulated Market-Energy Commission Licensed Bulk Customers Embedded in the

Network
Category 2022 2023 2024 2025 2026

Bulk (MV) 13 13 13 13 13
Bulk (HV) 14 14 14 14 14
Total 27 27 27 27 27
Out of the 28 bulk customers, 7 are steel companies who have a special regulated tariff approved
by the Commission. Only 7 bulk customers have negotiated their tariffs with ECG while the
remaining 13 are yet to request for a negotiated tariff.
14 Energy Allocated to Public Lighting (GWh)

A study on streetlight was carried out by the Ministry of Energy (MoEn) in 2018. This was aimed at
developing a strategy paper to guide the implementation of a nationwide street lighting
programme. The study identified over 498,035 streetlights connected to the various distribution
network across the country as well as over 2,100 solar powered streetlights. Out of the total of
498,035 lamps in use only 22,862 were LED lamps. It was established that majority of the energy
consumed by streetlights in Ghana were not measured.
This number of streetlights identified translated into a total annual electricity consumption of
649.05GWh. Accordingly, the study revealed that at an Average End User Tariff (AEUT) of
GHp63.5/kWh, equivalent to US cents 16.74 (based on USD1 to GHS3.794 used in the 2015 Utility
Tariffs), the above streetlight consumption amounted to a total cost of USD108.65 million.

The study therefore emphasised the need to determine the accurate amount of energy consumed
by streetlights through metering as well as the determining its equivalent cost using an
appropriate tariff. Thus, it was recommended that the PURC approves a tariff specifically for billing
of traffic lights, streetlights and public lights to enable the utilities bill the MMDAs appropriately.
According to the study, the use of the tariff for streetlight billing would then determine whether
the current levies charged for streetlights as per Act 946 are adequate or not.
The study further estimated that Ghana will require about 620,000 streetlights by 2020 to provide
adequate lighting for the country. This indicates a 24.5% increase in the number of streetlights
which could directly translate into same percentage increase in streetlight consumption by 2020.
Out of the 498,035 streetlights identified during the study, 391,497 were found within ECG’s
operational areas constituting almost 80% of the total. Consequently, the projected increase of
24.5% by end of 2020 could reflect same increase within ECG’s distribution zone to give an
estimated figure of 487,414.
The company’s Revenue Protection Unit have regularly carried out similar exercises to determine
streetlight consumption within the various operational areas. The streetlight consumption for the
next 5-year period has been projected to be constant at 534.65GWh annually, representing about
82% of total streetlight consumption in the country as at the end of 2020. Projections for the next
five years were made constant on the assumption that the MoEn would implement the
recommendations of the 2018 study which includes the enforcement of LED lamps whose
consumption may be as much as 50% lower.
ECG shares the view of the MoEn on the need for PURC to determine a tariff for streetlight. This
would help distribution utilities to account fully for the cost of streetlight consumption
14.1 Energy Allocated to Public Lighting (GWh)
Category 2022 2023 2024 2025 2026
Streetlight Consumption (GWh) 534.65 534.65 534.65 534.65 534.65

15 Distribution Company's System Load Data

Table 1 below shows the peak demand projections for the various markets for ECG for the tariff
period (2022 – 2026).
Table-1 System Load Data 2022-2026
Parameter 2022 2023 2024 2025 2026
Total System Load @ Peak 2,269.00 2,381.94 2,466.48 2,505.57 2,617.30
Regulated Market (Non-SLT Customers) 1,928.65 2,024.65 2,096.51 2,129.74 2,224.70
Regulated Market (SLT including Bulk Customers) 249.59 262.01 271.31 275.61 287.9
Regulated Market (Energy Commission Licensed
90.76 95.28 98.66 100.22 104.69
Bulk Customers Embedded in Disco Network)
Projected Base Load 2,269.00 2,381.94 2,466.48 2,505.57 2,617.30
16 Capital Expenditure
To continue to supply reliable and quality power based on load growth projections, ECG has
planned projects for network expansion, loss reduction, improvement in operational efficiency
(including revenue mobilisation) and system reliability, etc. to be undertaken during the regulatory
period 2022 to 2026. Greater Accra region has the highest demand growth projections and
therefore majority of these projects would be implemented in the capital.
Table 2 shows a summary of ECG’s investment plan for the regulatory period (2022 – 2026) in
accordance with the company’s approved format. The investment plan from 2022 to 2026 and the
ongoing projects have been factored in this proposal. This is based on the selection of committed
and feasible projects to be implemented within the tariff period.
A graphical view of ECG’s total capital expenditure in terms of completed, ongoing and planned
projects is shown in graph 6. The total cost of all three categories of investment is USD1.51 billion.
Details of the completed, ongoing and planned projects form part of the separate documentations
submitted to the Commission. The details of the investment plan include type of project, purpose,
location, cost, source of funding, start and completion schedule, benefits of the projects, etc.
Out of the total planned investment cost of USD959.85 million, the amount incorporated in this
tariff proposal is USD839.09 million. This excludes the cost for electricity access projects
(USD33.5m) and 10% contingency (87.26m). Electricity access projects could be funded by
government and would therefore not qualify to be factored in the tariff proposal.

Table-2 Summary of Capital Investment Plan (USD) 2022-2026
INVESTMENT PLAN (2022-2026)
Category 2022 2023 2024 2025 2026 Total

A. Network Capacity Expansion/Extension
Projects 108,674,006 23,412,639 2,600,000 13,000,000 9,540,000 157,226,646
B. Reliability Improvement Projects 45,723,762 11,162,647 8,723,044 9,481,351 9,975,263 85,066,067

C. Technical Loss Reduction/Voltage
Improvement Projects 1,451,540 1,125,000 1,125,000 1,500,000 2,250,000 7,451,540
D. Commercial/Revenue Improvement
Projects 106,332,162 99,556,095 96,029,883 96,744,618 97,748,703 496,411,461
E. Institutional Development Projects 12,000,000 21,575,862 21,877,586 16,440,172 21,042,349 92,935,970
F. Electricity Access Projects* 11,000,000 9,000,000 4,500,000 4,500,000 4,500,000 33,500,000
Contingency (10%)* 28,518,147 16,583,224 13,485,551 14,166,614 14,505,631 87,259,168
Total Cost (USD) 313,699,618 182,415,468 148,341,064 155,832,755 159,561,946 959,850,852
Grand Total (USD) 959,850,852
NB: *Electricity Access Projects and Contingency (10%) not included in Tariff Proposal
Graph 6 Graphical View of ECG’s Total Capital Expenditure (USD) 2022-2026

16.1 Capital Expenditure Financing Plan
Table-3 Summary of Capital Expenditure Financing Plan (Million GHS) 2022-2026
Item 2022 2023 2024 2025 2026
Accumulated Depreciation 2,923.77 3,461.28 4,047.20 4,686.21 5,525.79

Retained Earnings (1108.84) (1214.17) (1151.89) (1239.40) (1173.87)
Commercial Borrowings:
Domestic 13.00 12.46 11.72 10.81 9.91
Foreign 49.23 53.49 43.95 38.79 33.55
Additional Equity Contribution
By Shareholder(s)
Grants:
Domestic
Foreign
Tariff Revenue (Revenue
1,981.08 2,204.74 2,432.62 2,656.11 2,899.78
from Projected Capacity
17 Operation and Maintenance Costs

Table-4 Operation and Maintenance Costs (Million GHS) 2022-2026
Item 2022 2023 2024 2025 2026

Fixed O & M Costs 295.49 350.00 404.65 491.64 579.47
Variable O & M Cost 52.15 61.76 71.41 86.76 102.26
18 Administration and General Costs

Table-5 Administration and General Costs (Million GHS) 2022-2026
Item 2022 2023 2024 2025 2026

Fixed O & M Costs 120.10 127.22 135.66 145.31 154.25
Variable O & M Cost 223.04 236.27 251.95 269.87 286.46
19 Human Resource Costs - Employee Costs

Table-6 Human Resource Costs (Million GHS) 2022-2026
Item 2022 2023 2024 2025 2026
Fixed O & M Costs 341.7 392.96 392.96 432.25 432.25
Variable O & M Cost 634.59 729.78 729.78 802.76 802.76

Human resource cost for the company is directly linked to salary increments which takes place
every two years pursuant to the Collective Agreements (CA) between the company and its Senior
Staff Union (SSU) as well as its Junior Staff Union (JSU).
The salary component of the human resource cost during the five-year period has therefore been
aligned to the above agreements and would ultimately be approved by the company’s board.
20 Public Education
Table-7 Summary of Public Education Costs (Million GHS) 2022-2026
Item 2022 2023 2024 2025 2026

Stakeholder Communication &
8.59 10.18 11.77 14.05 16.86
Sensitisation (Public Education)
21 Financing and Interest Costs:
Table-8 Financing and Interest Costs (Million GHS) 2022-2026
Item 2022 2023 2024 2025 2026

Interest on Foreign Loans 84.39 84.97 84.80 83.54 80.94
Interest on Domestic Loans 331.32 347.38 364.24 381.94 400.53
Interest on Working Capital Loan 9.94 11.56 11.21 13.14 6.95
22 Return on Equity
Table-9 Equity Financing Costs (%) 2022-2026

Item 2022 2023 2024 2025 2026
Rate of Return 20.87 8.90 7.96 5.09 15.85
23 Depreciation
Table-10 Equity Financing Costs (%) 2022-2026
Item 2022 2023 2024 2025 2026
Rate of Return 17.03 10.26 11.12 13.26 5.725

24 Projected Electricity Distribution Revenue Requirement

Table-11 Summary of Distribution Company's Revenue Requirement (Million GHS) 2022-2026
Item 2022 2023 2024 2025 2026
A1. Capital Recovery Component (CRC)

1,539.59 1,906.41 2,267.05 2,659.94 3,377.22
for Legacy Assets
A2. Capital Recovery Component (CRC)
519.47 730.87 938.20 1,096.78 1,252.56
for New Investments
B. Fixed O & M Component (FOMC) 295 349 404 492 579
C. Revenue from Energy Charge 15,395.41 17,927.69 20,666.21 23,883.33 27,351.76
D. Reactive Power Charge 40.33 45.92 53.11 60.46 67.28
E. Revenue from Open Access -

N/A N/A N/A N/A N/A
Wheeling
F. Fixed Charges
F1. Service Connection Charge 78.03 89.73 103.19 118.67 136.47
F2. Reconnection Charges 1.03 1.14 1.25 1.38 1.51
F3. Interconnection Charges N/A N/A N/A N/A N/A
F4. Separate Metering Charges 13.43 14.77 16.25 17.88 19.66
F5. Penalties-Illegal Connection 10.04 11.05 12.15 13.37 14.7
F6. Revenue from National

291.61 332.05 384.05 437.15 486.47
Electrification Levy
25 Proposed Tariff and Rates Structure

The company’s proposed Annual Revenue Requirement (ARR) was based on PURC’s rate setting
guidelines. As discussed earlier, the full cost recovery concept was adopted in this tariff proposal.
The tariff proposal therefore assumed the cost of power procurement (excludes reserve margin
and idle capacity cost), a cost of transmission based on the current transmission service charge
and a cost recovery distribution service charge which would cover the company’s cost of
distribution.
The projected purchases and sales in gigawatt used in the tariff proposal is shown in the table
below. The cost of projected purchases was based on the commercial terms of the PPAs. The
projected system loss figures were aligned with the agreed benchmarks in the MOU between

Energy Commission and ECG.
25.1 Projected Purchases and Sales
Actual Projected
Item
2021 2022 2023 2024 2025 2026
Purchases (GWh) 14,222 14,418 15,499 16,661 17,910 19,253
Sales (GWh) 9,978 10,986 11,942 13,021 14,149 15,402
System Losses (%) 29.84 23.80 22.95 21.85 21.00 20.00
The components of the ARR include operational expenses (OpEx), depreciation, return on
Regulated Asset Base (RAB), return on working capital allowance, capital recovery payment, 2%
provision for uncollectible and corporate tax.
The gearing ratio (Debt-to-Equity) applied was 70:30. The Weighted Average Cost of Capital
(WACC) obtained was 16.02%. Similarly, an average rate of 5.2% was calculated based on ECG’s
proposed net and inventory days which was then used to obtain Working Capital Allowance
(WCA).
In view of the recent PURC rate setting guidelines, there was the need to segregate legacy assets
and the company’s own capital expenditure (new investment). It is assumed that majority of the
legacy assets have recovered their cost over the years though their replacement would always be
at the current costs. It was therefore inappropriate to apply same WACC on both legacy assets and
CapEx. In view of this, a 2% average rate of return was applied on legacy assets. The computed
WACC of 16.02% was however used in calculating the return on capital expenditure and the cost of
working capital allowance respectively.
The provision for uncollectible has been maintained at 2% though ECG believes that realistically a 5%
provision would ultimately provide the needed support.
The result of ECG’s tariff proposal for the next five (5) years shows an approximately 148% increase
on the current DSC1 in 2022 and an average increase of 7.6% year on year from 2023 to 2026. The
high increase in the DSC1 for year 2022 could be attributed to the gap that has developed over the
years between the actual cost recovery tariff and the PURC approved tariffs as well as the cost of
completed projects. This gap has been discussed earlier in section 1.3. The CAGR for the proposed
DSC1 over the five-year tariff period is 6%.

Similarly, ECG’s proposed DSC2 shows a higher increase of 28.4% in first year (2022) while that of
the subsequent years’ increases by an average of 2% from 2022 to 2026.
25.2 Multi-Year Tariff Proposal (2022-2026)
5-YEAR TARIFF PROPOSAL (GHS 'MILLION)

COMPOSITION OF ARR
2022 2023 2024 2025 2026
980.85 1,118.84 1,260.92 1,476.23 1,691.30

OPEX
976.29 1,122.74 1,122.74 1,235.01 1,235.01
HUMAN RESOURCE COST
1,196.85 1,560.13 1,894.82 2,264.02 2,979.85
DEPRECIATION
342.74 346.28 372.23 395.92 397.38
RETURN ON RAB
519.47 730.87 938.20 1,096.78 1,252.56
CAPITAL RECOVERY PAYMENTS
RETURN ON WORKING CAPITAL
8.04 9.34 10.37 12.33 14.00
ALLOWANCE
41.02 72.00 127.97 162.23 176.17
CORPORATE TAX
PROVISION FOR UNCOLLECTIBLES
323.69 360.32 412.25 437.15 486.47
(2%)
4,388.96 5,320.53 6,139.49 7,079.67 8,232.73
TOTAL ARR
DSC1 (GHS/kWh) 0.3995 0.4455 0.4715 0.5004 0.5345
PERCENTAGE CHANGE 148.0% 11.5% 5.8% 6.1% 6.8%
DSC2 (GHS/KWh) 0.1981 0.2022 0.2067 0.2133 0.2152
PERCENTAGE CHANGE 28.4% 2.1% 2.2% 3.2% 0.9%
25.3 Summary of Multi-Year Tariff Proposal (2022-2026)
PROPOSED DISTRIBUTON SERVICE CHAGRE (GHp/kWh)
CATEGORY 2022 2023 2024 2025 2026
DSC 1 39.9513 44.5521 47.1524 50.0364 53.4509
DSC 2 19.8080 20.2221 20.6722 21.3320 21.5239
26 Conclusion
The financial sustainability of the Electricity Company of Ghana is important as it impacts on the
entire energy sector. With the huge investment needs facing the distribution industry over the
next five years, it is expected that the proposed tariff increases would inevitably be approved to
sustain efficient and reliable electricity service.

Overall, this tariff proposal indicates a high increase (148%) in year 2022 compared with the
subsequent years’ increases of an average of 7.6%. This high increase in 2022 is largely attributable
to the cost of investment projects; the gap that has developed over the years between the actual
cost recovery tariff and the PURC approved tariffs; the continual application of the prevailing tariff
(which was a 14% reduction) beyond the stipulated regulatory period (2019-2020); and the effect of
macroeconomic factors.
Over the next five years, the DSC1 will need to increase consistently (average of 7.6%) to cover
distribution cost. It is expected that the approved BGC would correspond with the commercial
terms of PPAs. ECG also anticipates that the approved DSC1 would be an increase on the current
share (23%) of the EUT.
Tariffs for NSLT customers especially residential customers need to increase gradually in
accordance with their cost of service to eventually eliminate cross-subsidisation and ease the
burden on SLT customers.
ECG recommends an engagement with the Commission on the determination of the defined
threshold for a lower tariff for non-residential (commercial) customers in relation to the proposed
two-block tariff for all categories of NSLT customers.
The company anticipates that Government (MoF) would support its financial sustainability by
absorbing all cost associated with excess capacity charges. ECG hopes that government would
soon adopt a policy decision to deal with the issue of excess capacity once and for all. The
Commission is entreated to consider the recovery of reserve margin (18%) through the tariff as it
impacts the entire sector.
The company also seeks the support of government (MoEn) in relation to the proposal to
introduce a streetlight tariff to enable ECG to properly account for the full cost of streetlight
consumption. ECG’s analysis based on the current EUT, shows that streetlight consumption (6% of
total annual sales) would cost an estimated amount of GHS468.38 million per annum. Out of this,
ECG is expected to receive GHS 140.51 million (60% of the public light levy) leaving a shortfall of
about GHS327.87 million each year.
ECG indeed requires financial support through a full cost recovery tariff to ensure sustained
investment for reliable and quality supply of service to our cherished customers.
ECG hereby submits its 2022 tariff proposal for a five-year period (2022–2026) and recommends
approval of the entire multi-year tariff with the possibility of a review when necessary.

27 References
1. 2021 – 2024 Strategy Document; Electricity Company of Ghana Limited, March 2021
2. 2021 Budget; Electricity Company of Ghana Limited, December 2020.
3. Memorandum of Understanding Between the Energy Commission and Electricity Company
of Ghana Limited for Performance Monitoring, November 2020
4. Strategies for Streetlighting; Ministry of Energy, January 2018
28 Appendices
F-1D Distribution Sub-Transmission Data
F-2D Distribution Network Capacity Parameters Data
F-3D Distribution Substations Data
F-4D Distribution System Capital Outlay Data
F-5D Distribution Fixed Assets Schedule
F-6D Distribution Fixed Assets Depreciation Schedule
F-7D Distribution Project Cost Data (Foreign Costs)
F-8D Distribution Project Cost Data (Local Costs)
F-9D Capital Expenditure Funding/Financing Plan
F-10D Operation and Maintenance Cost Data
F-11D Administration and General Cost Data
F-12D Human Resource Cost Data
F-13D Customer Costs Data
F-14D Working Capital Requirement Data
F-15D Summary of Distribution Costs
F-16D Relevant Documentation in Respect of Distribution Tariff Proposal

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ELECTRICITY COMPANY OF GHANA LIMITED

ELECTRICITY DISTRIBUTION AND SUPPLY

AGGREGATE REVENUE REQUIREMENT AND TARIFF

Electricity Company of Ghana i

5.12 Government and Public Sector Debts......................................................................... 27

Electricity Company of Ghana ii

Table-2 Summary of Capital Investment Plan (USD) 2022-2026 ................................................... 44

Electricity Company of Ghana iii

1.1 Brief Background on Electricity Distribution and Supply Operations

ELECTRICITY COMPANY OF GHANA LIMITED 1

ELECTRICITY COMPANY OF GHANA LIMITED 2

1.2 Rationale/Objectives Underpinning Tariff Submission

1.2.1 Proposed Two-Block Tariff for Residential and Non-Residential Customers

Category First Tariff Block Second Tariff Block

Lifeline Tariff exclusively for Tariff applicable to all non-lifeline

Lower Tariff exclusively for a Tariff applicable to all customers

ELECTRICITY COMPANY OF GHANA LIMITED 3

1.3 Highlights of Major Issues Which Describe Structure of Tariff Submission

ELECTRICITY COMPANY OF GHANA LIMITED 4

Graph 1 Unstable Macroeconomic Variables

Source: Ghana Statistical Service Source: Bank of Ghana

1.3.1 Forex Losses to ECG in 2021

SUMMARY OF FOREIGN EXCHANGE LOSS (JAN - DEC 2021)

Total Charge at PURC Actual Charge to be

1 CENIT 469,165,700.00 61,259,029.91 329,371,426.12 365,788,745.19 (36,417,319.07)

2 Sunon Asogli 2,984,234,700.00 333,481,855.87 1,793,031,894.46 1,986,805,984.87 (193,774,090.41)

3 Bui Power 1,004,637,429.16 103,060,803.49 554,127,022.12 626,270,952.44 (72,143,930.31)

4 Karpowership 2,132,225,200.00 376,036,821.71 2,021,837,179.29 2,245,475,270.88 (223,638,091.60)

5 BXC 29,290,813.44 5,889,349.69 31,665,266.48 35,272,038.79 (3,606,772.31)

6 Cenpower 1,743,955,600.00 275,934,657.21 1,483,617,871.42 1,655,977,907.84 (172,360,036.42)

8 Meinergy 26,832,880.94 4,896,034.77 26,324,510.15 29,343,732.47 (3,019,222.32)

9 Amandi 1,078,957,300.00 98,800,501.70 531,220,657.49 602,218,480.51 (70,997,823.02)

10 AKSA Energy 350,832,880.00 149,786,658.56 805,357,927.08 896,629,976.73 (91,272,049.65)

Total 9,820,132,503.54 1,409,145,712.91 7,576,553,754.60 8,443,783,089.73 (867,229,335.12)

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Graph 2 World Market Prices of Metals

Source: Trading Economics

c. Unrecovered Pass-Through Power Procurement Costs: The significance of power procurement

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Graph 3 Levels of Power Procurement Costs (Ghp/KWh)

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2 Initiatives Undertaken Since July 2019 Tariff Review

2.1 Projects Undertaken and Impact

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Graph 4 Impact of CAPEX on Reliability

2.2 Compliance with Directives of the Commission

3 Key Policy Issues for Tariff Consideration

a. Disaggregation of DSC to reflect the implementation of the Wholesale Electricity Market

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3.1 Cost of Stranded Assets

TOTAL (USD Millions) 10.29

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4 Proposed Service Delivery and Efficiency Improvements During Tariff Period

4.1 Service Delivery and Efficiency Targets

4.1.1 Service Delivery and Efficiency Targets