Utility companies must improve service delivery to the public or face “stiffer penalties and sanctions”, the Public Utilities Regulatory Commission (PURC) has warned.

The commission on Wednesday demanded improved services from the utilities when it announced a hike in power and water tariffs.

“The utility service providers should reposition themselves to deliver quality of service and respond adequately to the needs of consumers by implementing appropriate mechanisms and ensuring that they minimise the response time to faults that occur in the distribution network,” the PURC said in a statement.

“It is the strong view of the commission that an increase in tariff should correspond to an improvement in quality of service, and the commission will ensure that key benchmarks for attainment of the acceptable levels of quality of service are strictly adhered to,” it added.

The commission said technical and commercial losses should not exceed 21% for distribution companies -- the Electricity Company of Ghana (ECG) and Northern Electricity Distribution Company (NEDCo).

The ECG has managed in the last two years to reduce its technical and commercial losses from 27 percent to about 22 percent, but the regulator wants the electricity distributor to further reduce its losses.

“[The ECG should develop] an efficient billing and revenue collection effort to meet the regulatory benchmark of a 95 percent collection ratio, and address challenges associated with pre-paid meters being used by consumers,” the PURC said.

The commission also wants the Ghana Grid Company Limited (GRIDCo) to limit its transmission losses to 3.5 percent, while the Volta River Authority (VRA) is to ensure generation plant availability of 92 percent for thermal plants, and 95 percent for hydro.

The commission said utility service providers must further institutionalise effective and prudent cost-control measures to ensure a fair return on investment, and undertake internal restructuring to provide the necessary guidance and supervision to ensure effective and efficient operations.