<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Feb 9, 2009
</TR><!-- headline one : start --><TR>Electricity bill to fall in Q2 <!--10 min-->
</TR><!-- headline one : end --><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Fiona Chan
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
</TD><TD vAlign=bottom>
To achieve this, EMA has embarked on a pilot project called the Electricity Vending System (EVS), which will provide a cost-effective platform for full retail competition. -- PHOTO: ST
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"-->HOUSEHOLDS' electricity bills are likely to fall again in the second quarter of this year, in line with the slide in global fuel oil prices, said Senior Minister of State for Trade and Industry S. Iswaran on Monday.
This is on top of a 25 per cent fall in the first quarter, after electricity tariffs peaked at the end of last year, he told Parliament.
To keep the costs of energy competitive, the Energy Market Authority (EMA) is looking at ways to further open up the electricity retail market, Mr Iswaran added.
One idea is for power generation companies to submit competitive bids to provide a portion of domestic electricity consumption. The EMA will complete a detailed study of this proposal by the end of the year, he said.
Another scheme to increase competition in the market is the Electricity Vending System, which allows households to buy electricity directly from individual competing providers. This has been introduced in Marine Parade and West Coast, and will be widened if it proves feasible.
'Competition in our power sector has been a bulwark against rising energy prices,' Mr Iswaran said.
Singapore is particularly vulnerable to volatility in global energy prices as it imports almost all its energy supplies.
Since the Government began to liberalise the electricity market in 2001, domestic electricity tariffs have risen much less than global oil prices.
Global fuel oil prices have shot up by 143 per cent between April 2001 and last month, but local tariffs have gone up by only 19.9 per cent in the period, even after including the effects of the Goods and Services Tax (GST).
The EMA is also revising the formula for calculating electricity rates to make them less volatile.
Currently, to determine the tariff for any particular quarter in a year, it relies on the oil prices at the beginning of the previous quarter. For instance, to set the rate for January to March this year, it would look at the oil prices in October last year.
But this could give rise to larger fluctuations if oil prices are very volatile.
So a new formula is being proposed to smoothen the volatility and make tariffs more reflective of prevailing market conditions. Instead of just referring to the prices at the beginning of the previous quarter, EMA will take the average of the oil prices over all three months of the previous quarter.
This means that to calculate the rate for January to March this year, it would use the average oil price between October and December last year. This revised formula will be used starting from the third quarter this year, Mr Iswaran said.
</TR><!-- headline one : start --><TR>Electricity bill to fall in Q2 <!--10 min-->
</TR><!-- headline one : end --><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Fiona Chan
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
To achieve this, EMA has embarked on a pilot project called the Electricity Vending System (EVS), which will provide a cost-effective platform for full retail competition. -- PHOTO: ST
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"-->HOUSEHOLDS' electricity bills are likely to fall again in the second quarter of this year, in line with the slide in global fuel oil prices, said Senior Minister of State for Trade and Industry S. Iswaran on Monday.
This is on top of a 25 per cent fall in the first quarter, after electricity tariffs peaked at the end of last year, he told Parliament.
To keep the costs of energy competitive, the Energy Market Authority (EMA) is looking at ways to further open up the electricity retail market, Mr Iswaran added.
One idea is for power generation companies to submit competitive bids to provide a portion of domestic electricity consumption. The EMA will complete a detailed study of this proposal by the end of the year, he said.
Another scheme to increase competition in the market is the Electricity Vending System, which allows households to buy electricity directly from individual competing providers. This has been introduced in Marine Parade and West Coast, and will be widened if it proves feasible.
'Competition in our power sector has been a bulwark against rising energy prices,' Mr Iswaran said.
Singapore is particularly vulnerable to volatility in global energy prices as it imports almost all its energy supplies.
Since the Government began to liberalise the electricity market in 2001, domestic electricity tariffs have risen much less than global oil prices.
Global fuel oil prices have shot up by 143 per cent between April 2001 and last month, but local tariffs have gone up by only 19.9 per cent in the period, even after including the effects of the Goods and Services Tax (GST).
The EMA is also revising the formula for calculating electricity rates to make them less volatile.
Currently, to determine the tariff for any particular quarter in a year, it relies on the oil prices at the beginning of the previous quarter. For instance, to set the rate for January to March this year, it would look at the oil prices in October last year.
But this could give rise to larger fluctuations if oil prices are very volatile.
So a new formula is being proposed to smoothen the volatility and make tariffs more reflective of prevailing market conditions. Instead of just referring to the prices at the beginning of the previous quarter, EMA will take the average of the oil prices over all three months of the previous quarter.
This means that to calculate the rate for January to March this year, it would use the average oil price between October and December last year. This revised formula will be used starting from the third quarter this year, Mr Iswaran said.
