The Centre for Environmental Management and Sustainable Energy (CEMSE) has revealed that Ghanaian electricity consumers overpaid an estimated GH¢1.5 billion in the fourth quarter of 2025, attributing the excess to inflated exchange rate and inflation assumptions used by the Public Utilities Regulatory Commission (PURC) in tariff calculations.
In a policy review released recently, CEMSE called for a double-digit reduction in electricity tariffs—approximately 11 percent—in the first quarter of 2026, arguing that current economic realities justify such a cut to provide relief to households and businesses.
The report centres on PURC’s tariff methodology for Q4 2025, which projected an exchange rate of GH¢11.9735 to the US dollar, later adjusted to GH¢12.3715 to accommodate under-recovery claims from utilities.
However, the actual average exchange rate during the quarter stood at GH¢10.8733 to the dollar, leading to what CEMSE describes as an over-recovery of GH¢1.1002 per dollar.
Based on total quarterly electricity consumption of 6,459 gigawatt-hours, and assuming 60 percent of generation costs are dollar-denominated, the think tank estimates that consumers bore approximately GH¢1.5 billion in unnecessary costs that utilities did not incur.
CEMSE also pointed out significant discrepancies in inflation projections. PURC applied a 12.43 percent annual inflation rate in its Q4 model, whereas the actual average inflation for the quarter was only 6.6 percent—nearly half of the assumed figure.
The group highlighted ongoing volatility in revenue performance at the Electricity Company of Ghana (ECG) despite repeated tariff hikes. For instance, ECG recorded about GH¢1.4 billion in revenue in April 2025 before initial increases, which dropped to GH¢1.3 billion in May following a 14.75 percent adjustment, rose to GH¢1.6 billion in June, but fell back to GH¢1.3 billion in August amid further upward revisions.
With the cedi currently trading around GH¢10.99 to the dollar and projected inflation for Q1 2026 at just 3.4 percent, CEMSE warned that failing to implement a substantial tariff reduction would damage the credibility of PURC’s quarterly review mechanism.
The organisation stressed that any over-recoveries must be formally recognised and credited back to consumers before new tariff adjustments are applied.
CEMSE cautioned that inaction could further erode public trust in the regulatory process, intensify financial pressure on households and businesses, and undermine efforts to ensure affordable and reliable electricity supply in the country.