The Public Utilities and Regulatory Commission (PURC) violated the rule of natural justice by failing to give the directors of the Electricity Company of Ghana (ECG) the opportunity to be heard prior to imposing the fines, Lawyers of the board members of the ECG, have said.
The lawyers say that the PURC has unlawfully clothed itself with the powers of the High Court, and imposed a sentence on the Board Members, without having been given the opportunity to be heard.
The directors therefore reject the contents of the regulatory order relative to any personal liability on their part, the lawyers said.
They explained that the directors are not responsible for the day-to-day administration of the company and, therefore, are not principal officers to be held liable for a default on the part of ECG.
“It must also be stated that, the Electricity Company of Ghana Limited as a corporate body has a legal personality that is distinct from its Board Members. This is the very foundation of Company Law. The officers of the company cannot be held liable for the acts of the company. Lifting the veil of incorporation to go after the officers of the company can only be done in exceptional cases and can only done by a court of competent jurisdiction.
“The Commission’s lack of jurisdiction, power and/or authority to lift the vail of incorporation in the instant matter to purport to impose regulatory charges personally on the Board Members of ECG is strengthened by the provisions of Sections 38 & 42 of The Public Utilities Regulatory Commission Act, Act 538,1997.
Sections 38 & 42 of The Public Utilities Regulatory Commission Act, Act 538,1997 provides as follows:-
38. Offences and penalties
A public utility which
(a) fails to comply with the required standards of performance in the provision of utility services,
(b) refuses to provide its utility service contrary to section 15 (1),
(c) charges or demands for its services rates not approved by the Board contrary to section 18(1)
“As stated above, under Section 38 of Act 538 a default on the part of a public utility in the payment of a penalty may lead to the personal liability of a principal officer of the public utility. Under Section 49 of Act 538 a principal officer means the person responsible for the day-to-day administration of the affairs of the public utility.
“Board members of ECG are not responsible for the day-to-day administration of ECG and, therefore, are not principal officers within the intendment of Act 538 to be able to be held liable for a default on the part of the public utility ECG.
“The Commission’s Order imposing regulatory charges on the members of the Boards is unlawful, null and void as same is without jurisdiction. By this Order, the Commission has unlawfully clothed itself with the powers of the High Court, and imposed a sentence on the Board Members, without having been given the opportunity to be heard which amounts to a breach of the rules of natural justice. Our clients, therefore, reject the contents of the regulatory order relative to any personal liability on their part,” the letter to the PURC said.
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, the Commission in accordance with Regulation 45 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, the
Commission 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 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’. While it lays the blame at the doorstep of the Ghana Grid Company (GRIDCo), the latter also points to ECG for not complying with notices given to it.
Amid this blame game, the Board Chairman of the ECG, Mr Keli Gadzekpo resigned for “personal reasons.”
