Households to see average rise of about 21% in electricity bills from Oct

S.Ramesh, Channel NewsAsia 29 Sep 08;

SINGAPORE: Singaporeans will see an increase of 21 per cent in their electricity bills in the last quarter of this year.

The average electricity tariffs from October to December would go up by 5.38 cents per kilowatt per hour. The Energy Market Authority (EMA) said the increase is due to higher fuel oil prices.

For the last quarter of this year, oil prices were nearly S$155 per barrel, 38 per cent more than the third quarter.

So average monthly electricity bills look set to rise by S$5.70 to S$22.92 for those living in one- to five-room public housing flats.

For those living in the one- to three-room flats, this works out to an increase of between S$90 and S$223 in electricity bills for this year.

"I am jobless, so burden for me also," one individual said.

"Even though I don't pay the bill, my son does so I still feel the pinch for him," said another.

Seah Choon Seng, executive director, Consumers Association of Singapore, said: "The 20 per cent adjustment in tariff price is quite hefty for consumers to bear and I suppose one of those very high adjustments we see in many years. We feel that the companies involved in the utilities business should work harder in improving their efficiency to bring down the costs for consumers."

The EMA said the government's U-save rebates of S$310 to S$330 to help offset increases in utilities bills is more than enough to cover this year's electricity price increase for one-, two- and three-room HDB flats.

For four-room HDB households, the increase to the bill size for this year would be marginally higher than the U-save rebate given. These homes received S$295 in U-save rebates. But the total bill size for 2008 is estimated at S$316.

The EMA feels there is more room for Singaporeans to conserve and use less energy. That's because the EMA's surveys and findings show that nearly 40 per cent of Singapore homes are using more energy than they require to. And the air conditioner is one of the largest energy guzzlers in homes here.

Khoo Chin Hean, chief executive, EMA, said: "There is a lot of use which can be curtailed. There is probably quite a bit of wasteful usage. It is this kind of usage we can be more mindful of and take measures to manage our consumption."

The authority said if the forward fuel prices come down next month, the electricity tariff from January to March 2009 will be reduced accordingly. - CNA/vm

Electricity bills to go up 21%
Families in smaller flats will get relief from Government rebates
Liaw Wy-Cin, Straits Times 30 Sep 08;

ELECTRICITY bills will go up about 21 per cent tomorrow, the highest one-time increase in about seven years, according to the Energy Market Authority (EMA).

Those living in three-room Housing Board flats, for example, will see their average monthly power bills rise by $14, while five-roomers will pay $23 more a month.

Over the year, three-roomers will see their average utilities bill for power, water, gas and refuse collection rise by $223.

But there is relief for them. The Government's U-Save or Utilities-Save rebates of $310 for three-roomers and $330 for those in smaller flats - given in three instalments in January, July and November - will more than cover the increase.

Households in larger public housing apartments will have to pay for some of the increase out of their own pockets as the rebates, provided on a sliding scale, are meant to help the lower- and middle- income families.

Electricity tariffs, which are reviewed every quarter, have gone up for five straight quarters since July last year, because of rising oil prices.

With the latest round of increases, electricity tariffs go up from about 25 cents per kilowatt-hour to just over 30 cents.

EMA, the electricity and gas industry regulator, said that since 2004, electricity tariffs have been pegged to the price of fuel oil delivered to power generation companies for the next three months.

Known as 'forward fuel oil' prices, it is less volatile than the 'spot oil' prices quoted for immediate deliveries, explained EMA chief executive Khoo Chin Hean.

Petrol and diesel pump prices, which have come down in recent weeks, are also not an indicator of how much power generation companies have to pay, he added.

Mr Khoo said the forward fuel oil prices for the next three months is $155.14 per barrel, up 38 per cent from $112.35 per barrel for the current quarter.

But he held out hope that if oil prices continue to soften in the coming months, electricity tariffs could come down in the next quarterly revision, due in January.

Households can also do their part to trim their bills.

The scope for savings is high considering that power consumption patterns show that 40 per cent of households, from one-room flats to landed properties, use more than the monthly average, said Mr Khoo.

Private school lecturer Sally Chew, 47, and her family of five will see their monthly bill of $290 going up to about $350 with the new tariffs.

To keep the bill for their five-room flat below $300, 'we will switch to the fan instead of running the two air-conditioners the whole night as we do now'.

Some families have switched to a prepaid metering scheme after they had their power supply cut off or were in danger of having the supply disconnected.

Up to June this year, 13,700 households are on the Payu, or Pay As You Use, scheme which replaces conventional power meters with meters that work only if an account has sufficient credit in it.

Community development councils also offer vouchers to needy residents who have problems keeping up with payments.

Given that social workers have found about 35 per cent of those who have trouble paying their electricity bills live in four- and five-room flats, one MP suggested more flexibility in deciding who gets help, instead of looking only at housing type.

Mr Charles Chong (Pasir Ris-Punggol GRC) said: 'I have residents living in five-room flats coming to me for help, because they have lost the breadwinner. There are also retirees in private property living off their savings. Any increase will have an impact on them.'

Biggest hike in 8 years
Oil prices may be falling, but energy authority says tariffs based on market’s projections
Neo Chai Chin, Today Online 30 Sep 08;

EXPECT to pay an average of 21.5 per cent more on your monthly electricity bill until the year’s end, consumers have been told. The question on the minds of those who have watched oil prices decline since July would be: So why are tariffs rising?

As SP Services announced the biggest jump in quarterly electricity tariffs since the market began opening up in 2001, the Energy Market Authority (EMA) anticipated this question with a readyexplanation backed up with charts and figures.

Power tariffs, it said at a press briefing, are pegged to forward oil prices, which is the price agreed between the buyer and the seller for delivery of the oil at a specified future date — say, three months down the road.

This is based on how the market expects oil prices to behave in future. This is different from spot oil prices which are for immediate or near-term delivery.

Charts comparing spot and forward prices over four years show that the latter fluctuate less drastically.

“In a market where oil prices are relentlessly moving up, by pegging to three-month forward fuel price, we have been better off by and large,” said EMA chief executive Khoo Chin Hean, referring to how oil prices have surged over the last year.

For example, from April to July, spot prices varied between $115 and $155 per barrel; forward prices saw a smaller increase, from about $106 to $112.

One component of electricity tariffs, however, will decrease — transmission charges. From tomorrow, they will make up only 16 per cent of households’ tariffs, down from 20 to 25 per cent. The new rate will hold for the next five years.

Transmission charges are set by the EMA for SP to recover costs from buying, installing and maintaining transmission equipment. Over the years, SP has become more efficient, hence profiting more from transmission charges. EMA is lowering transmission charges to “make them share some of this profit with consumers”, said Mr Khoo.

How TO cope with the hike

This reduction in transmission charges to some extent offsets the increase in fuel costs. Still, it would mean that from next month, a five-room flat household would pay $22.90 more than the previous average $106.80 bill.

With EMA and the National Environment Agency advising consumers to cut back on electricity by using less air-conditioning, switching off lights and opening refrigerator doors less often, consumers told Today they have been practising good habits in recent months.

“This increase is very siong (hard-hitting). But the market is a monopoly, we can ’t do anything about it,” said Mr Liao Ching Hing, 61, who lives in a four-room flat and is between jobs. He now spends $70 to $80 monthly on electricity, lower than the average four-room flat’s expenditure of $91.76.

Secretary Christina Choo, 48, said public education is still necessary, especially for the tech-savvy younger set. “Some surf the Net for the whole day as they have unlimited usage subscriptions. But they have to understand their computers still use up electricity. In our days, we would shower with cold water and use manual fans,” said Mdm Choo, whose family of four lives in a condominium and pays about $150 monthly for electricity.

As for the lower-income, the EMA said that Utilities-Save rebates – meant to offset the GST hike and inflation – disbursed this year will more than make up for the increase in utilities bills for the lower-income.

The five Community Development Councils also help the low-income with measures such as organising money-saving workshops and handing out utilities vouchers.

SUBHD: Looking ahead to next year...

Going forward, can Singaporeans hope for lower tariffs in the first three months of next year, come the next tariff revision by SP Services?

Mr Khoo said this is “difficult for me to answer”.

But he observed that historically, forward prices drop if there is sustained decrease of spot oil prices. Market sentiment “isn’t that great” currently, he added.

In the longer term, could having many retailers selling electricity to households bring tariffs down?

The EMA is likely to announce, end-2009, if it will introduce an electronic vending system aimed at liberalising the consumer electricity market.

Mr Khoo said that with a competitive market, retailers would fight harder to attract customers, but this may not lead to lower prices. Instead it could lead to more “innovative” packages such as a free air-con when a contract is inked.

“So long as the consumer finds value-add, why not?” he said.