Published September 30, 2008
Power tariffs shoot up on oil price spike
Average hike of almost 22%; EMA thinks divestment of gencos will help
By RONNIE LIM

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(SINGAPORE) Electricity tariffs for the coming October-December quarter will go up by more than 20 per cent, according to Singapore Power subsidiary SP Services, which supplies electricity to some industrial customers as well as all households here.
The hike follows higher forward fuel oil prices of S$155.14 per barrel for the fourth quarter, or 38.06 per cent higher than that of S$112.35 per barrel in the current quarter.

This is the highest quarterly increase in eight years, according to the Energy Market Authority (EMA).
The average electricity tariffs will be increased by 5.38 cents per kWh (kilowatt hour), or an increase of 21.46 per cent for households, SP Services said. On average, taking into account all customer categories, the increase works out to 21.89 per cent.
The hike follows higher forward fuel oil prices of S$155.14 per barrel for the fourth quarter, or 38.06 per cent higher than that of S$112.35 per barrel in the current quarter.
But SP Services added that its electricity transmission grid charges (paid by the gencos) will be revised downwards from October and will then account for only 16.16 per cent of the low tension tariff (from about 20-25 per cent currently).
EMA regulates the transmission charges of SP Services as it is a monopoly service. And because of efficiency gains by the latter, the charges - applicable for the next five years - are being lowered.
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Going forward, one can expect more competitive electricity prices once Temasek Holdings completes its divestment of the three biggest generating companies (gencos) here to new owners, said EMA chief executive Khoo Chin Hean. The entry of more new players like Island Power - whose case, he said, 'will be resolved very soon' - will also help.
'It's already happening with the (wholesale) electricity prices which the gencos bid to sell into the grid,' he said, adding that EMA, which has been monitoring the keen market competition, 'expects more of this to happen'.
Mr Khoo was responding to BT on whether EMA had noticed any impact so far on electricity prices here following Temasek's sale of Tuas Power and Senoko Power to deep-pocketed owners China Huaneng and Japanese/French Lion Group respectively, with just one genco, PowerSeraya, left to go.
The genco divestment - part of the overall liberalisation of the electricity and gas markets here - will also see new investments in more efficient and 'greener' plants as well as the use of more competitively priced fuels, Mr Khoo said at a media briefing yesterday.
Tuas Power, for instance, just last week announced a S$2 billion investment in a multi-utilities Jurong Island complex which will be the first here to be coal/biofuels firing. And Senoko Power, under its new owners, is scheduled to announce major new 'repowering' investments today.
On a separate issue, EMA said that it expects to resolve 'very soon', Island Power's application to gain access to the offshore portion of a Sumatra-Singapore pipeline to bring in Indonesian natural gas to fuel its long-delayed S$1 billion Jurong Island power project.
Island saw Indonesia cancelling its gas supply deal a year ago because of its inability to use the pipeline. Once this snag is resolved, the project can restart. Planned since 2002, Island's 785-megawatt plant will add to electricity supplies here from other players like Sembcorp and Keppel Corp, which also have Jurong Island power projects.
Island's parent, Intergen, is now 50 per cent owned by India's GMR Infrastructure, which was reportedly among those that bid for both Tuas Power and Senoko Power. If GMR finally succeeds in securing a Singapore genco, namely PowerSeraya, this may ultimately influence the Island Power project.