It’s arbitrary for PURC to have imposed sanctions without hearing the directors – ECG MD

The Managing Director of the Electricity Company of Ghana (ECG), Samuel Dubik Mahama, has said that it is rather arbitrary for the Public Utilities and Regulatory Commission (PURC)  to have proceeded to impose sanctions on the directors of the ECG when it has drawn its own conclusions without hearing them.

More worrying, he said, is the fact that PURC proceeded suo moto to impose sanctions per alleged incidents of infraction rather than dealing with the incidents as a composite matter.

This approach obviously provides PURC the avenue to exact outrageous sums against ECG which is clearly at odds with an administrative body’s constitutional duty to be reasonable, Mr Mahama said.

“This unreasonableness is further manifested when one considers how self-serving it is for PURC to wait and seek to obtain funds for itself under the guise of regulatory charges based on number of incidents.

“Further proof of the unreasonableness of PURC is expressed in its order directed at Board of Directors of ECG to pay the said regulatory charge on ECG’s behalf.

This decision is neither grounded on the fact that the Commission found the Board of Directors culpable nor complicit of any wrongdoing but simply in its opinion that, to sanction ECG would have implications on consumers.

Per the definition of Public Utilities under Act 538, ECG, a body corporate, qualifies as a public utility subject to the lawful regulatory powers of PURC,” he said in a statement.

His statement added “Furthermore, the basis for the sanctions against the Board of Directors does not fall under any of the provisions of the Companies Act, 2019 (Act 992) that permit/allow for sanctions imposed on officers or members of the Board of Directors of a limited liability company.  The sanctions thus imposed against the Board Members of ECG have no legal basis and is tantamount to lifting the corporate veil which is ultra vires the powers of the PURC.

“Following our above submissions, we strongly advise that the Commission immediately withdraws the Further Orders dated 15th April 2024, directed at ECG and its Board of Directors as same is null and void.

We will plead with your establishment for more in depth cooperation and assistance.”

The PURC has given a six-week ultimatum to the Board Members of the Electricity Company of Ghana (ECG) to pay a fine of Five Million, Eight Hundred and Sixty-Eight Thousand Ghana Cedis (GHS5, 868,000.00).

The fine was imposed as result of the ECG’s failure to notify its customers about power outages between January and March this year.

This is contained in an order statement issued by the PURC on April 15, 2024.

“For failure to comply with the 3-day statutory notice required under Regulation 39 of L.I.

2413, hereby imposes a regulatory charge of 3,000 penalty units on ECG for each of the 163 breaches, amounting to Five Million, Eight Hundred and Sixty-Eight Thousand Ghana Cedis (GHS 5,868,000.00).

“The Commission has determined that having regard to the nature of ECG’s ownership and business, the imposition of the penalty of Five Million, Eight Hundred and Sixty-Eight Thousand Ghana Cedis (GHS 5,868,000.00) on ECG would be counter-productive, as payment from ECG’s revenue would have a rebounding adverse effect on quality of service and consumers who pay tariffs to the company,” the PURC stated.

It noted that “in the interest of justice and to protect the interests of consumers, theCommission shall hold the Board Members of ECG who were in office between 1 January to 18 March 2024 liable for the payment of the Five Million, Eight Hundred and Sixty-Eight Thousand Ghana Cedis (GHS 5,868,000.00).

These Board Members were at all material times responsible for providing strategic direction to ensure the provision of safe, adequate, efficient, reasonable and non-discriminatory service to consumers.”

The PURC said the Board members have up to 30th May, 2024 (6 weeks) to pay the fine.

 

“The Board Members of ECG in office between 1 January to 18 March 2024 shall pay the regulatory charge of Five Million, Eight Hundred and Sixty-Eight Thousand Ghana Cedis (GHS5,868,000.00) into a dedicated fuel account under the joint control of the Ministry of Energy and the Ministry of Finance on or before 30th May, 2024,” the regulatory body ordered.

It would be recalled that in March 2024, the PURC warned that it would be compelled to issue regulatory sanctions against the power distribution company.

This came after the regulatory body observed that the ECG had failed to comply with its directive to release a load-shedding timetable corresponding with the timelines and duration for each transformer injection.

The regulator said it had not seen any evidence of the publication of the load management timetable despite being ordered to do so.

In that regard, the Commission said it “is finalizing regulatory action on the above.” Thus, the fine imposed on the Board members.

The ECG has been facing public backlash due to the prevailing erratic power supply situation in the country, locally known as ‘Dumsor’.