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ECG Celebrates 50years. +++ 50 Years of Powering the Socio-Economic Growth and Development of Ghana

ELECTRICITY RATE FILING FOR 2019

 

1.0      Introduction

The Electricity Company of Ghana Limited (ECG) as an electric power distribution utility is mandated to provide quality, reliable and safe electricity services to support the growth and development of the Southern Electricity Distribution Zone (SEDZ). The company has performed this mandate through the procurement of bulk power from power producers and contracted GRIDCo to transport the power to the bulk supply points where ECG takes and processes the power for use by its cherished customers.

The provision of such services requires the use of a robust power infrastructure and modern technologies which support the distribution and retail of electricity in an efficient and cost-effective manner to customers. ECG has since 1967 (then the Electricity Corporation of Ghana) pursued this drive to ensure that quality electricity services are provided to its customers.

On 5th August 2014, the Government of Ghana signed the Compact II with the Millennium Challenge Corporation (MCC) of the USA under the theme “Powering Ghana for an Accelerated and Sustainable Growth”. The Compact, which has a five-year duration commencing September 2016, is expected to provide USD535.6million to support various programs in the Energy Sector of Ghana. One component is the ECG Financial and Operational Turn-around Project (EFOT) which entails the following:

  • Private Sector Participation (PSP) in ECG;
  • Modernization of ECG’s operations;
  • Reduction in Commercial losses and improvement in revenue collection;
  • Reduction in technical losses; and
  • Reduction in power outages. 

  

Under the PSP arrangement, ECG has signed a contract with the Power Distribution Services (Ghana) Limited (PDS) – the Concessionaire - to manage, operate and maintain its electricity distribution network and assets over a period of twenty (20) years commencing 1st February 2019.

 

2.0      Structure of Electricity Distribution Post PSP in ECG

From 1st February 2019, ECG will perform the following functions:

  • Sell bulk electricity to the Concessionaire, PDS;
  • Monitor and supervise the operations of PDS to ensure that key performance indicators are achieved as specified in the contract; and
  • Identify potential customers beyond the borders of Ghana and sell bulk power to such customers.

The PDS shall be required to perform all power distribution and retail services on behalf of ECG under defined terms and conditions contained in the contract. Hence all ECG customers will be served by the PDS.

Under the project agreements, PDS is required to raise capital to finance investments needed to revamp the ECG’s electricity distribution network; operate and maintain the network to achieve set Key Performance Indicators (KPIs) and enhance the provision of electricity services to the SEDZ.

 

3.0      Revenue of Restructured ECG

ECG under the new structure (i.e. Restructured ECG) will earn a return on its network assets which have been leased to PDS under a Lease and Assignment Agreement (LAA), a Bulk Supply Agreement (BSA) and a Government Support Agreement (GSA). The earnings of ECG which is also called the Lease Payments (LP) and payable by PDS is currently under assessment by the Ministry of Finance (MoF) and the Public Utilities Regulatory Commission (PURC) on behalf of the Government of Ghana (GoG).

 

 

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ECG at 50

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