PURCing the Ghanaian Consumer- A Comedy of Public Utilities

By Jean Lukaz MIH, The Consumer Partnership-Ghana

Pronouncing verdicts may be an easy task for the Public Utilities Regulatory Commission (PURC), but PURCing the Ghanaian Consumer with oversize tariffs and with very little expectations other than promises from the monopolies of an electricity cartel and an Aqua-something-Vitens is not amusing.

Concocted Households? By way of what is believed to be a ‘social tariff’ or government subsidy we are being made to believe that poorer consumers are protected. As if by design the average Ghanaian household since creation consumes within the 0-50 bracket, popularly referred to as the "lifeline" as well as rural consumers who hardly have electricity and worst of all have their meters physically removed by the Electricity Company of Ghana (ECG) for their inability to pay for their ‘lifelines’, the PURC may be the first to relieve itself of erratic and unsatisfactory utility supplies. Let’s see if the PURC on its new premises can afford and survive on pre-paid meters with their queuing subventions from a Government that constantly has over-outstanding and overdue utility bills that encourage utility service providers to underperform.

Monopolies versus Rights to Basic Needs and to Choice The consumer right to satisfaction of basic needs includes the right to water and electricity. The first priority of all governments should be to make safe, affordable drinking and wastewater services as well as electricity available to all consumers and subsidies should be concentrated on poor consumers. The Consumer Partnership (The COP) believes that being monopolies for the sake of social good have created comfort zones for utility providers, thereby enabling them to muffle Ghanaian consumers from their right to choice. Unconscionable in their nature and existence by not warranting Ghanaian consumers an alternative other than the devil and the deep blue sea, we can only have to look over the fence to see one of the biggest oil suppliers with one of the highest per capita generator use in the world, a signature of unguaranteed promises and false expectations. Who owns what may not be the pre-eminent issue, but consumer protection is. This should be the guiding principle behind the regulation of utilities.

Price Price controls should continue as long as public utility providers remain monopolistic. Price controls should take into account profit levels and rate of return on capital. The rate of return should be little more than is necessary for an industry to attract the necessary capital for investment. Increases in prices should be mitigated by reductions in non-payment and waste. Raising the proportion of consumers, both industrial and domestic, who pay their bills, would result in significant increases in revenue and reduce the pressure to raise tariffs. It would also be fairer than raising tariffs while significant numbers of consumers continue to avoid payment.

Coverage The dilemma of who bears the investment cost of infrastructure extension is rendered less acute by efficiency gains. It is important to understand what costs are included in determining tariffs, and whether cost alone is the sole determinant of price. It is also important to understand the relationship between the price consumers pay and the true cost of running the utility as loading the cost onto present or new consumers can create unfair burdens. An important issue arises here as Ghanaian consumers believe they are bearing the cost of the inefficiency of utility service providers. The utility may also find it difficult to keep prices down if some large consumers, for instance government offices, do not pay their bills as is the case in Ghana.

False Expectations Hoping to milk Ghanaian consumers in the short run to acquire some equipment of a kind may sound persuasive to gullible consumers whilst offering clear timelines for delivery of a purported improved service may be verboten and belated. For those that are asking Ghanaian consumers to consult President Obama for a dose of ‘Audacity of Hope’ from some West African Gas pipelines that have been overflowing with hot air, and a justification from a Jubilee anniversary platform that is yet to see the light of day, should rather consult their horoscope to see better times next year.

Big Ears, Small Voice Safarying the country and PURCing the Ghanaian consumer in the guise of public hearings for what seemed to work in the interest of utility service providers, the mockumentary of ‘A Comedy of Public Utilities’ has finally been rolled out and PURC is definitely having a laugh as they can only hear themselves. Consumer Education (CE) roundtables have been elevated to high tables in star-rated hotel conference rooms where all classes of consumers, including rural utility consumers, play Ghostbusters. In fact, Ghanaian consumers hate rating the credibility of PURC, so please do not ask.

www.ghanaconsumerwatch.blogspot.com www.ghanaconsumerwatch.wordpress.com www.theconsumerpartnership.wordpress.com

Jean Yaw Twum Lukaz MIH MSc MA/LLM BA(Hons)

Skype:jean.lukaz LinkedIn: http://gh.linkedin.com/pub/jean-lukaz/20/20a/486Facebook: http://www.facebook.com/jean.lukaz http://www.nathanielturner.com/darktourisminghanajosephproject.htm Postal Address:PMB 28, Kanda, Ghana; Tel:+233 275 315 135