Electricity price hike could have been higher

Electricity price hike could have been higher
Posted: 11 April 2011 1733 hrs

SINGAPORE: The 6.1 per cent electricity price hike for the next three months from April to June may have hit some pockets.

But Senior Minister of State for Trade and Industry S Iswaran said in Parliament on Monday tariffs would have been even higher, if not for the strong Singapore dollar.

Unrest in the Middle East and the nuclear crisis in Japan have caused oil prices to increase by about 14 per cent to S$113 per barrel in the first quarter of the year.

But any impact on electricity prices here has been cushioned by global currency movements.

"An appreciating Singapore dollar has helped to cushion the effects of rising fuel oil prices which are denominated in US dollars," Mr Iswaran said.

"Since the beginning of 2010, the Singapore dollar has appreciated by about eight per cent against the US dollar.

"Without this, the electricity tariff in the second quarter of this year would have been five per cent higher."

Mr Iswaran also said the move away from oil-fired steam plants by power generation companies since 2001 to more efficient gas-fired combined cycle gas turbines has also reduced the impact of price hikes in oil.

"Had we continued to use steam plants, the electricity tariff today would be about 15 per cent higher," he said.

Assuming that household electricity consumption does not change, the six per cent tariff increase means that those living in four-room flats would have to pay on average, S$4.85 more each month.

But Mr Iswaran said there is targeted assistance for those who have trouble paying their bills.

This year alone, the government will give out S$250 million in utilities rebates, starting from this month.

Those in four-room flats will receive S$320 -- enough to offset their bill for the next three-and-a-half months.

Those living in three-room flats will get S$340 in rebates to cover five months' worth of electricity consumption.

Overall, the amount given to families in three-room flats is five-and-a-half times more than the actual increase in their bills in the past year.

Since 2007, about S$800 million worth of electricity rebates have been given to some 800,000 households.

Mr Iswaran added that there are programmes to help businesses become more efficient in energy use.

These include schemes to raise awareness on energy management and available energy efficient technologies, provide support for companies which are trying to adopt such technologies, train energy management professionals, and encourage sharing of best practices in energy efficiency among companies.

These are administered by the Energy Efficiency Programme Office (E2PO), a multi-agency committee led by the National Environment Agency and the Energy Market Authority.

-CNA/wk

- wong chee tat :)