Regulation of electricity utilities – sales of power

Approval to sell power

What authorisations are required for the sale of power to customers and which authorities grant such approvals?

In Ghana, an electricity sale licence is required for the sale of power to customers. Distribution companies hold both electricity distribution licence and electricity sale licence. This is because the electricity distributors also sell electricity to consumers.

A distribution and sale licence authorises the licensee to operate a distribution network, and to distribute, sell or retail electricity.

There are two stages involved to acquire an electricity sale licence. These are the acquisition of provisional licence and acquisition of operational licence (authorisation to operate).

Sale of power to consumers in Ghana is done by three distribution companies, namely ECG, NEDCo and Enclave Power. The authorities which grant approvals are the Energy Commission and the PURC.

There are two types of markets, namely, the regulated market and deregulated market.

Regulated market: this includes the distributors and sellers that are directly supervised by the PURC. Their tariffs are set by the PURC.

Deregulated market: this is made up of bulk consumers or customers with average demand of 3MVA or annual consumption of 6GWh. They must obtain a permit as bulk customers from the Energy Commission before they can negotiate with suppliers or generators of electricity.

Power sales tariffs

Is there any tariff or other regulation regarding power sales?

In Ghana, distribution of power and sale of power are done by the same entities. The PURC determines distribution or sale service charges. Because distribution and sale are done by same entities, the tariff for sale of power is embedded in tariff for distribution of power. Power sales tariffs are the same as the DSC as approved by the PURC.

Wholesale suppliers are entities that generate power and feed into the grid. They also sell power to bulk customers. The tariffs to be charged by the licensee for its services are determined by the PURC.

Rates for wholesale of power

Who determines the rates for sales of wholesale power and what standard does that entity apply?

The rates or charges for wholesale supply of electricity are determined by the PURC. The Energy Commission grants wholesale supply licence to public utilities to operate facilities and installations for the wholesale supply of electricity. The wholesale supply licence permits the public utility to produce electricity for supply to distribution companies and bulk customers.

A wholesale supply licence will not be granted unless the Energy Commission is satisfied that the grant will promote the safe, reliable and economic operation of the interconnected transmission systems in the country.

Public service obligations

To what extent are electricity utilities that sell power subject to public service obligations?

There are standards of performance to be observed by the utilities. Except where a licence or authorisation given to a public utility is revoked, suspended, cancelled or expires, a public utility cannot refuse to provide its service generally without the prior written permission of the Energy Commission.

Licensed public utilities are required to maintain their equipment and property used in the provision of the service in a condition that enables them to effectively provide their services. They must make the reasonable effort necessary to provide to the public a service that is safe, adequate, efficient, reasonable and non-discriminatory.

Public utilities must submit monthly bills to their consumers. There are strict rules governing the termination of services by public utilities.

Licensed public utilities are required to make the repairs, changes, extensions and improvements in or to the service that are necessary or proper for the efficient delivery of the service to the consumer. Licensed public utilities are subject to penalties for failure to discharge their service obligations including payment of compensation to consumers who suffer on account of that failure.