The Electricity Company of Ghana (ECG) says it can also not accept blame for Thursday’s power cut experienced in some parts of the country.
On October 26, the Ghana Grid Company Limited (GRIDCo) in a statement explained that the cause of the power cuts was due to limited gas supply to Tema leading to a shortage of 550MW at peak time.
The shortage led to the power outage on that Thursday night. GRIDCo subsequently apologized for the inconvenience caused.
Later on Saturday, October 28, the ECG and GRIDCo in a joint statement, announced the successful restoration of power as a result of the resumption of gas supply to the generating plants in Tema from Takoradi.
But the Ghana National Petroleum Corporation (GNPC), which receives gas from the West African Gas Pipeline Company for onward supply to the power plants, has absolved itself of blame for last Thursday’s power supply challenges.
In a press statement issued on Monday, October 30, GNPC said some “misinformed individuals depicting themselves as energy analysts” have blamed it for the outage.
According to the nation al oil company, some analysts had claimed that the incident happened due to their failure to pay West Africa Gas Pipeline Company Limited (WAPCO) its debt.
It explained that it is ECG that pays WAPCO directly or otherwise for gas transported.
“The gas is transported to the Independent Power Producers (IPPS) to generate power that ECG distributes to consumers as electricity. Ultimately, monies received by ECG after the sale of electricity is utilised to pay, either directly or indirectly, all the electricity service providers downstream of the value chain, including WAPCO.”
“Traditionally, ECG pays for gas transportation invoices through the Cash Waterfall Mechanism (CWM). However, funds received by GNPC from ECG have not been sufficient to pay for the WAPCO invoices, especially in recent times.
But the Managing Director of ECG, Dubik Mahama, while speaking on PM Express on Monday, October 30, expressed disappointment over GNPC’s handling of the matter, saying the press release was unnecessary.
“What I know is that within the value chain, we are all supposed to work together. When I read their [GNPC] statement it saddens me because this is not something I was expecting because I felt the problem had been resolved and everybody was moving forward, and both GRIDco and ourselves had issued a statement to that effect, so it was neither here nor there, and I don’t even know why they should have even issued the statement in the first place” he argued.
But that being said, we work with something called the Cash Waterfall Mechanism (CWM) in distributing the resources under the collections that we make in a month. The new cash waterfall provides for tier one and tier two. So tier one is the IPPs, and I must say for four months now, the ECG has been paying the IPPs and ECG hasn’t failed, it has been constant with the IPPs, and you can check with all of them,” he noted.
According to him, earlier this year, when WAPCO shut down on GNPC, it was the ECG that stepped in to make payment for restoration of WAPCO supplies without going public with it.
“Conversations concerning WAPCo and GNPC, this is not the first time ECG has had to step in and bail GNPC out. Legally, ECG has no contract with WAPCO so the CWM is a suggestive approach to making sure that GNPC gets something on a monthly, weekly or bi-weekly basis to pay these bills. What is sad about this press release is that they failed to mention what ECG did for them when this thing came up” he posited.
Asked whether he did not think the power outage was the ECG’s fault, he said “Honestly, I don’t because if we have agreed to something that legally it’s not on us, then to what end? However, we agreed to CWM because we wanted an equitable share of the money that ECG collects now on a monthly basis.
“When WAPCO was writing WAPCO never wrote to ECG. ECG sells electricity. We don’t even know the quality of gas or whatever. Ours is electricity. Every PPA that we sign, when we agree on the price in cents, it has a fuel component in it. The fuel is always a pass-through because now we give them gas from our fields, so this whole conversation has nothing to do with the availability of gas, but more so the transportation of the said gas from the western corridor to the eastern corridor; that’s the reverse flow, and that’s the reason we are where we are.”
Mr. Mahama ECG is currently experiencing a dip in revenues because power purchase during the rainy season is usually less, making it difficult to raise enough to meet their final obligations.
“Electricity sale is seasonal, there is downtime, and downtime is when the weather is cold,” he noted.