The Electricity Company of Ghana (ECG) has expressed disappointment with the recent report by the Public Utilities Regulatory Commission (PURC) concerning its operations, particularly as they relate to the Cash Waterfall Mechanism (CWM).

In a statement issued on Thursday, ECG argued that the PURC report misrepresents several key aspects of its operations. The company specifically took issue with how its fuel costs, a vital component for maintaining operations, were labeled as a “variance” in the report.

ECG highlighted that it has made considerable progress under its current leadership, including the independent procurement of fuel, which should be acknowledged rather than framed negatively.

The ECG further pointed out that the report overlooks forex losses and the delays in payments to Independent Power Producers (IPPs), portraying an incomplete picture of the company's operational challenges.

A major point of contention is the PURC’s labeling of ECG’s fuel costs as a “variance.” The ECG maintains that fuel procurement is essential to its operations and has been managed effectively under its current management. In the past, the company faced difficulties in securing fuel, but recent strides have allowed ECG to procure fuel independently—an achievement the company believes should be celebrated, not dismissed as a negative variance.

"Unlike previous years, ECG has taken strides to ensure its ability to procure fuel independently, a significant achievement that should be acknowledged rather than downplayed,” the statement said.

Forex Losses and Payment Delays to IPPs

The ECG also raised concerns about the report’s treatment of payments to Independent Power Producers (IPPs). According to the company, delays in payments were mainly to settle outstanding amounts from previous months, a standard practice in account management. The company stressed that it had complied with payments to Tier 2 beneficiaries, including the PURC itself, throughout the period under review.

Additionally, the ECG emphasized that the report overlooks the impact of foreign exchange losses on its ability to meet financial obligations. Discrepancies between the PURC’s exchange rate and the market or Bank of Ghana (BoG) rates have led to significant forex losses when making payments to IPPs and WAPCo. In July 2024, for example, ECG paid WAPCo US$3 million, which amounted to GHS48 million. However, the PURC recorded this as GHS43 million, failing to account for forex fluctuations.

Call for Constructive Leadership and Accurate Reporting

ECG’s statement urged the PURC to adopt a more constructive approach in its assessments, one that reflects the progress being made within the energy sector. The company emphasized that mischaracterizing fuel procurement and downplaying improvements in operations could mislead the public and detract from the advancements made under the current leadership.

"By framing necessary costs like fuel procurement as variances, the PURC risks confusing the public and detracting from the real improvements made by ECG and other players in the sector," the company noted.

ECG called for greater collaboration and transparency, stressing the need for accurate reporting that would foster progress in the energy sector as Ghana moves toward future challenges, including forex fluctuations and fuel procurement issues.

In conclusion, ECG urged the PURC, under the leadership of Dr. Ishmael Ackah, to focus on clarity, constructive leadership, and the recognition of genuine progress in Ghana's energy sector.