Leong Sze Hian
I refer to the report “Electricity tariffs for households to go up by 12.5% in Q4″ (CNA, Sep 29).
According to Hong Kong electricity producer CLP Power, which supplies about 80 per cent of Hong Kong’s power needs, in a media statement last year (Sep 2008), Singapore was ranked second among 21 cities for raising electricity tariffs most, since 2005.
For example, Singapore’s tariff in the table, rose by about 60 plus per cent, compared to about 15 per cent and 10 plus per cent for Hong Kong and Kuala Lumpur respectively.
Singapore Power’s (SP) Net Profit After Taxation for FY08/09 was $798 million, with revenue of $6,618 million.
Since SP provides the delivery of electricity, what about the profits of the power generation companies? Three of Temasek’s power generation companies have been sold to foreign companies.
For example, one of Singapore’s power companies, Seraya Power, was sold to YTL Corporation in Malaysia.
According to YTL’s web site, YTL Power registered a 43.8% jump in revenue for the 12 months ended 30 June 2009, due principally to the consolidation of approximately 4 months’ results from PowerSeraya, with PowerSeraya contributing RM197.4 million (US$56.4 m) in profit before tax.
As this is the profit from just one power generation company, how much in total profits do all the power generation companies make in a year?
And how much of these profits end up in the hands of foreign companies?
With about 117,000 unemployed residents as of June, and perhaps hundreds of thousands of Singaporeans suffering from reduced earnings in the current economic downturn, isn’t it time for a review of our national utilities policies, which allow the power sector to make huge profits, and to sell companies to foreign companies, without the need for parliamentary debate or approval?
Singapore’s tariff for the quarter starting in October, will be 21.69 cents per kilowatt hour, compared to Hong Kong’s 75.7 HK Cents (S$0.136) to 95.5 HK Cents (S$0.172) depending on consumption volume.
By the way, Hong Kong’s CLP Power froze and maintained their tariff for nine consecutive years until 2007.
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“But nevermind, can collect back losses from users. brilliant”
ya lo, if true. another extension to such brilliant way in rent seeking. hip hip hooray, more good years to come ? such invaluable talent we have ……
99) luke
When did SP sell SP Building?
When did SP Ausnet value tanked?
EMA, IDA, SP etc and many gov agencies located in the city has been systematically moving out of the city as they do not need to be located in the city centre and there is an opportunity cost of occupying these premises.
Over the past decades, IRAS, HDB, MHA, and many more gov dept have moved out of the city centre. It helps in traffic congestion too.
DBS, even Citi group will be moving out to Changi eventually.
IBM has already moved to Ubi sometime ago.
By all MEANS,
throw in more statistics;
compare apple with orange;
divert attention;
To an END,
negating the role of social security role of a government.
We can duplicate the regime of MSM here, online. Or we just simply go back to the basics of ‘GOVERNMENT’.
98) KopitiamApek on October 8th, 2009 1.04 pm
99) luke
When did SP sell SP Building?
When did SP Ausnet value tanked?
———————
SP Ausnet is listed on the SGX………….the info including share price can be found there.
To luke 96):
Singapore Power International got caught buying Aussie asset in 2007 costing billions which was intended to be unloaded to SP Ausnet, but then got stuck because of the financial meltdown. Of course the value has since dropped a lot.
Most of our electricity is powered by Natural Gas or Diesel, but we are using Fuel Oil Price volatility to derive our electricity tariffs.
Different classes of fuel are subject to different supply and demand situations and prices tend to move differently.
Why cant we use cost based approach (i.e. if its powered by natural gas pay natural gas price, powered by diesel pay diesel price)? instead of using a price formula that could be subject to manipulation, and always end up with the best outcome for the supplier. e.g. electricity tariffs up cos Fuel Oil Price up and when Fuel Oil price comes down, we can lower electricity tariffs cos diesel/ natural gas is more expensive now?
@KopitiamApek
SP power sold its building a year ago? Cant remember exact date but this info is public. So was the rating downgrade.
It was not SP Ausnet, it was other assets it bought together with babcock and brown. SP wanted to inject the assets into SP Ausnet post acquisition, but obviously the minorities of SP Ausnet said – fark off guys! The assets you paid were overvalued, dont dump it into SP Ausnet!!! Hence no equity deals done, they had to refinance the huge borrowings. Of course with the kind of cash generation that they have, plus the Temasek implied support, no problems. Banks will lend.
It gives the impression that the Tender Loving Care companies (or rather Temaske Linked companies) are under tremendous pressure to expand through M&A and often times acquire assets at high valuation.
Most people forgot that electricity pricing in Singapore is done by subsidising industrial usage by overcharging home consumption.
If this is already expensive on average, had we use an index for the household price tag for electricity usage, we will surely be number 1.
Why is it that home consumption should subsidize industrial consumption?
our electricity prices almost amongst highest in the world, perhaps there is a correlation between ministers’ pay and electricity price?
Don’t fret…………….technology is on the way that will significantly reduce energy demand for Air Conditioners and cars and later, its application on oil Refineries. Tests procedures will be outlined with BCA and Vicom as to demonstrate the efficacy of these patented and proven technologies.
NUS has been brought as a facility to do their own research on the technoogy as well.
why do we have to peg gas to fuel oil price? as a major buyer, the genco can more or less set its own terms and conditions. there is no need to use any formula or peg to anything. the genco can buy at a fixed, average, floating price, etc. or even have its own formula or can even buy at a discount to the market. it’s all a matter of negotiation between buyer and seller.
to tell us that they have to buy at a formula pegged to fuel oil price is bullshit, either they don’t know how to draft a simple contract or it’s s big lie.
basically the genco is like a trading company, it buys at a price at that point in time that it believes was the best price possible. it then sells to end users like us the consumers, based on the prevailing tariff. however during the interim period the market moves against it and it incurs a loss. but in the case of our gencos, no problem, just pass the loss on to the consumers and in the process even turn in a profit.
they can never lose as we are the suckers who will bail them out everytime. why do we allow them to do this to us?
we r owned….forever…
until we can unite and do something abt it…
People has to Pay Until Bankrupt previously!
Now left with no choice – Sure Pay!
We should be grateful for the Electricity pricing has gone up.
it gives us a chance to show people we can afford , that we are 1st world cost of living.
lets be grateful and not lament.
lets accept our fate.
lets forget the bad things and remember the good things.
together , we can come together.