PURC Ghana

ct 541) PURC also has regulatory responsibility over charges for supply, transportation and distribution of natural of natural gas services. Under Section 4 of Act 538, PURC is an independent body and is not subject to the control of any authority in the performance of its functions. The Office of the President exercises administrative oversight for the Commission. MISSION
To build a credible and sustainable utility regulatory regime that protects the Stakeholders’ interest. VISION
To be a model Utility regulatory institution in Africa

MEMBERS OF THE PUBLIC UTILITIES REGULATORY COMMISSION
The nine (9) member Commission is appointed by the President for a 5-year term. REGULATED COMPANIES
Entities currently regulated by the PURC are the Volta River Authority (VRA), Northern Electricity Distribution Company (NEDCo) a subsidiary company of VRA, the Ghana Grid Company (GRIDCo), the Electricity Company of Ghana Ltd (ECG), as well as Ghana Water Company Ltd. The Commission is to regulate natural gas pipeline transmission tariff and aggregated gas prices processed by the Aggregator, which is the Ghana National Gas Company (GNGC). For Bui Power Authority (BPA), the Commission will set the Bulk Generation Tariff (BGT) and also review its pricing component of the Power Purchase Agreement (PPA) with ECG and NEDCo. ELECTRICITY
About 1180MW of the total installed capacity of 2,186 MW is generated mainly from two hydroelectric dams on the Volta River at Akosombo and Kpong. The rest of the capacity is made up of thermal generation sources. With a customer base of approximately 3.0million, it is estimated that more than 72% of Ghanaians have access to electricity. WATER
The Commission’s regulatory purview covers the operations of Ghana Water Company Ltd (GWCL), which is responsible for urban water supply. At the moment, GWCL runs 86 systems throughout the country with a customer population of over 10.8 million. The current urban water coverage is estimated at about 63.37%. NATURAL GAS
Ghana National Gas Company (GNGC) has commenced the building of the infrastructure required for gathering, processing and delivery of natural gas resources to industry in a safe, cost effective, responsible and reliable manner. The overall goal of the project is to “ensure that natural gas, associated gas and Natural Gas Liquids (NGLs) produced in Ghana are effectively and efficiently processed into clean fuels and feedstock for domestic, and export market; promote the development of petrochemical industries; substantially reduce and/or eliminate flaring of gas; and develop Western Region of Ghana as a new economic growth pole for the country in the long term. The initial gas to be processed will come from the Jubilee field which is located approximately 50km offshore Ghana at Cape Three Points, in the Western Region.”

The gas processing plant is expected to receive 140 million Standard Cubic Feet of raw gas per day from the Jubilee Oilfield. The plant would then separate raw gas into various components as well as other residues like propane, bitumen and others. The lean gas would then be transmitted through pipelines to the Aboadze metering station for power generation. It is the expectation of the Commission that the completion of the project would reduce the fuel costs associated with LCO used for power generation and in effect drive down the cost per MW of energy produced. The Commission derives its power to regulate aspects of Natural Gas under Section 25 of the Energy Commission Act 1997, Act 541 which provides among others that the PURC shall approve charges for supply, transportation and distribution of natural gas. RENEWABLE ENERGY
In 2012, the Public Utilities Regulatory Commission (PURC) in collaboration with the Energy Commission worked out a comprehensive “ Feed -in- Tariff Policy and Guidelines “ which will ensure transparency and predictability to all renewable energy stakeholders, protect the public interest and guarantee a reasonable rate of return to investors by way of operationalizing the Renewable Energy Act 2011(Act 832). The Commission again in line with its statutory duty and commitment to improving renewable energy pe*******on in order to achieve Government’s target of 10% renewable energy in the country’s energy mix by 2020 has now gazetted the Feed-In-Tariff (FIT) rates applicable to renewable energy sources. According to the Renewable Energy Act 2011(Act 832)”Renewable Energy means energy obtained from non- depleting sources and these are:
• Wind
• Solar
• Mini Hydro
• Biomass
• Bio-fuel
• Landfill Gas
• Sewerage Gas
• Geo-Thermal Energy
• Ocean Energy
• Any other Energy Source designated in writing by the Minister. FUNCTIONS OF THE COMMISSION
The functions of the PURC are to:
• Provide guidelines on rates chargeable for the provision of utility services;
• Examine and approve rates chargeable for the provision of utility services;
• Protect the interest of consumers and providers of utility services;
• Monitor standards of performance for the provision of utility services;
• Initiate and conduct investigation into standards of quality of service given to consumers;
• Promote fair competition among public utilities;
• Conduct studies relating to the economy and efficiency of public utilities;
• Make such valuation of property of public utilities as it considers necessary for the purpose of the Commission;
• To collect and compile such data on public utilities as it considers necessary for the performance of it’s functions;
• To maintain a register of public utilities;
• To perform such other functions as are incidental to the foregoing. The Commission does not exist solely for the benefit of any one group, but must balance the interest of all the parties, both consumers and industry players. RESPONSIBILITIES OF PUBLIC UTILITIES REGULATORY COMMISSION UNDER THE RENEWABLE ACT 2011(Act 832)

Under the Renewable Energy Act the PURC is responsible for the following:
• Rates chargeable for the purchase of electricity from renewable energy sources by public utilities
• Charges for grid connection
• Rates Chargeable for the wheeling of electricity from renewable energy sources

REQUIREMENT FOR A LICENCE
A person shall not engage in a commercial activity in the renewable energy industry without a license granted under the Renewable Energy Act, the Commercial activities are the following:

• Production
• Transportation
• Storage
• Distribution, Sales and Marketing
• Importation
• Exportation and re-exportation
• Installation and Maintenance

A person who engages in a commercial activity in the renewable energy industry without a license issued by Energy Commission as provided in the Renewable Energy Act commits an offence and is liable on summary conviction to a fine not exceeding two thousand penalty units or to a term of imprisonment not exceeding five years or to both. FEED IN TARIFF SCHEME
A feed in Tariff Scheme has been established by the Renewable Energy Act for the purpose of guaranteeing the sale of electricity generated from renewable energy sources. The Feed-in tariff scheme consists of:

• Renewable Energy purchase obligation
• The Feed In Tariff Rate
• A connection to transmission and Distribution systems

FEED IN TARIFF RATES
An electricity distribution utility shall not negotiate a Power Purchase Agreement with a generator of electricity, buy power from a generator of Electricity from a Renewable Energy Source without the written approval of the Public Utilities Regulatory Commission

The Public Utilities Regulatory Commission (PURC) shall prepare and provide public utilities with guidelines on the level of rates that may be charged by the public utility for electricity generated from renewable energy sources. The Commission shall take into account the following:

• Technology being used in the renewable energy industry
• Operating norms for the specific technology under consideration
• Costs associated with construction, commissioning, operation, and maintenance of the plant
• The reasonable rate of return
• The Balance between the interest of the consumer and the investor
• The Feed in Tariff rate fixed for electricity from renewable energy sources shall be guaranteed for a period of ten years and subsequently be subject to review every two years
• The Public Utilities Regulatory Commission shall in determining the mechanism for the regulated electricity market factor into the Tariff the price differential between the purchase price of electricity generated from renewable energy sources and the price of electricity purchased from other sources

APPROVAL OF FEED IN TARIFF RATES
• A Public Utility shall not demand a feed - in - Tariff rate for electricity generated from renewable energy sources unless the feed In Tariffs rates chargeable has been approved by the Public Utilities Regulatory Commission
• A Public Utility shall not directly or indirectly demand or receive a feed in tariff rate approved by the Public Utilities Regulatory Commission in relation to Electricity generated from Renewable energy sources
• Despite the above provision a public utility may demand and receive from a consumer a higher feed In tariff rate agreed to by both the public utility and the consumer with the written permission of the Public Utilities Regulatory Commission

PUBLICATION OF FEED IN TARIFFS
Feed- in Tariff Rates approved by the Public Utilities Regulatory Commission for electricity generated from renewable energy sources shall be published by the Public Utilities Regulatory Commission in the Gazette and in at least one daily newspaper. ACTIVITIES OF THE COMMISSION

TARIFF SETTING
Tariff Setting Guidelines

Pursuant to its statutory responsibility, PURC has a Tariff Setting Guideline which guides the Commission, utility companies and other stakeholders as a transparent basis for setting rates for both electricity and water. Guidelines are currently being developed in respect of natural gas services. In preparing the Guidelines, the Commission is enjoined by statute to take the following into account:

• Consumer interest;
• Investor interest;
• The cost of production of the service;
• Assurance of the financial integrity of the public utility

Procedure for Approving Tariffs

Tariff review proposals are submitted by the Utility Service Provider 60 days before the effective date of the new tariffs. PURC interrogates the proposals and if need be requests from the utility companies such information as may be necessary before arriving at a final tariff decision. As a measure towards including public input into the tariff decision making process, the utilities are mandated to publish their proposals in the public media. Subsequent to the publication, nationwide Public Hearings are held at which the utility company presents its proposals to the public and various interest groups. The contributions and comments from the Public Hearings are taken into account by the Commission in arriving at the final tariff decision. PURC must by law make the tariff decision within 30 days of receiving all the necessary information from the utility company regarding the tariff review. Tariff Regime

PURC’s policy is to institute an efficient tariff regime that ensures reasonable rates which assure the financial integrity of the Public Utilities. During the major tariff review in 2010, the Commission incorporated the Automatic Adjustment Formula (AAF), which was, implemented quarterly (February – April; May – July; August – October; and November – January). The aim of the AAF was to sustain the real value of the tariffs by adjusting it, based on variations in factors such as:
• Fuel Price (light crude oil, natural gas, etc)
• Foreign Exchange
• Inflation
• Generation (Hydro – Thermal) Mix

In consonance with Government of Ghana’s Poverty Reduction Strategy (GPRS), PURC has maintained its policy of instituting lifeline tariffs for low-income consumers with significantly low consumption levels. The lifeline tariff continues to be provided at below the cost of electricity provision. CONSUMER PROTECTION
A major function of PURC is to protect the interest of consumers. The following activities regarding consumer protection are highlighted. QUALITY OF SERVICE MONITORING
In furtherance of PURC’s statutory responsibilities, good regulatory practices and a commitment towards ensuring a high quality of service, the Commission incorporates Performance Targets for compliance by the Utility Companies when approving new tariffs. Since 2001, approval of tariffs has been contingent upon the attainment of these targets and benchmarks. To ensure effective monitoring and adherence to these targets, PURC developed a Quality of Service Reporting Form for the supervision of quality of service delivery to consumers. The monitoring is based on a network which enhances information flow on the quality of service among major stakeholders including the media. Quarterly review meetings as well as surveys, field visits and spot checks are variously undertaken. PURC has also prescribed a reporting format, which facilitates data collection from the utilities. PERFORMANCE STANDARDS AND CONSUMER CHARTERS

To further ensure PURC’s quality of service monitoring, other measures have been instituted such as Standards of Performance which have been developed by licensing authorities such as Energy Commission. This is aimed at ensuring that consumers receive the right kind of service from the Utility Service Providers. In addition, PURC is assisting the Public Utilities to develop Consumer Charters, which spell out the utilities obligation towards their customers and the consumer’s rights. The finalized charters would soon be published in the media. RULEMAKING FUNCTIONS AND REGULATIONS

Prior to the establishment of PURC, the utility companies were self – regulating monopolies. That arrangement was not only undesirable but also lent itself to abuse. To strengthen consumer rights and maintain a culture of sensitivity to bill paying and responsible consumers, PURC has issued a couple of Regulations to govern the utility/customer relationship. These are:

PUBLIC UTILITIES (TERMINATION OF SERVICE) REGULATIONS, 1999 (LI 1651)

As the title connotes, these Regulations govern service disconnections. These Regulations have introduced civility into service provision by prescribing proper procedures for disconnection of service to customers. After administering the Regulations for six years, they have been amended to offer greater protection to utility customers (i.e. Water and Electricity)

PUBLIC UTILITIES (COMPLAINTS PROCEDURE) REGULATIONS, 1999 (LI 1665)

These provide a framework for hearing and determining complaints and serve as the dispute resolution mechanism in respect of consumers complaints against the utility companies. PUBLIC UTILITIES (CONSUMER SERVICE COMMITTEE) REGULATIONS, 2002 (LI 1704A)

These Regulations provide for the establishment of Consumer Service Committees in the districts or such other geographical areas as the Commission may determine. DECENTRALISATION

REGIONAL OFFICES

In addition to the main office in Accra, PURC has regional offices in Kumasi, which serves the Ashanti and Brong - Ahafo Regions; Takoradi which serves the Central and Western Regions; Tamale which serves the Northern, Upper West and Upper East Regions; Koforidua which serves the Eastern Region, as well as Ho which serves the Volta Region. This is in fulfillment of Commission’s policy of decentralization of its operations, which aims at ensuring that consumers derive maximum benefit from its services. Following the establishment of these regional offices the Commission has as a matter of policy decided to set up offices in all the regional capitals to serve as focal points where consumer concerns would be addressed in the regions. CONSUMER SERVICES COMMITTEES

The Commission intends to establish the Consumer Services Committees as voluntary bodies to monitor the activities of the utilities in the districts; educate customers regarding their rights and responsibilities and advice the Commission on levels of quality of service as well as matters affecting customers within the Committees’ jurisdiction. The Commission has established Consumer Service Committees in three Regions of the Country. HOW PURC ENFORCES ITS DECISIONS

Under the PURC Act, 1997 (Act 538), the Commission may apply to the High Court for the enforcement of its decisions or directions. ENFORCEMENT OF PURC DECISIONS

• The Commission considers the recommendations and makes a final decision.
• The Commission may apply to the High Court for the enforcement of its decisions and orders. PAYMENT OF BILLS DURING INVESTIGATION OF COMPLAINT
• Generally, any undisputed portion of the customers’ bills must be paid to avoid disconnection of service. However, customers are not obliged to pay disputed bills while the complaint is being investigated.