Revised electricity tariff formula to kick in from July

Revised electricity tariff formula to kick in from July
By Hasnita A Majid, Channel NewsAsia Posted: 31 March 2009 1823 hrs

SINGAPORE: The revised electricity tariff formula for households will kick in from July after the Energy Market Authority's (EMA) consultation with key stakeholders in the energy industry and members of the public.

The new approach will calculate the electricity tariff for the third quarter of 2009, from July to September 2009, based on the average of fuel oil prices in the preceding three months – from April to the middle of June 2009.

Currently, the EMA uses only the fuel oil price in the first month of the previous quarter to set tariffs for the current quarter.

SP Services, which supplies electricity to all households, will calculate the new tariff and seek EMA's approval before announcing it by end-June.

EMA said the revised formula will allow the electricity tariff to be more reflective of the prevailing market price of fuel, since more recent fuel price data will be used in computing the tariff.

The averaging of fuel oil prices over the three months will also help to smoothen out any large swings in the fuel oil market within this period.

EMA also pointed out that while the revised formula is an improvement over the existing one, it does not necessarily result in a lower tariff all the time.


- CNA/so