16 January 2015

Transparency and Energy Market Authority / SP Services

Minister of State for National Development Desmond Lee Ti-seng recently claimed that Aljunied-Hougang-Punggol East Town Council, which is run by The Workers' Party, was not transparent.

Is Energy Market Authority ("EMA") transparent?

EMA, a statutory board under the Ministry of Trade and Industry, sets the guidelines for, and approves, the non-contestable electricity tariffs. Households and small businesses are the main non-contestable consumers of low tension electric power.

SP Services Ltd, the market support services licensee, provides metering and billing services to the electricity market. Its ultimate parent company is Temasek Holdings.

Commencing with its media release in connection with the electricity tariff for Q2 2006, SP Services included a chart showing the effect of fuel oil price on the low tension tariff:

Presumably (I'm guessing), SP Services wanted to show the public that rising fuel oil prices were behind the increase in the low tension tariff.

SP Services stopped providing the chart in its press announcements beginning Q3 2012, but continued providing the chart in its media releases for two more quarters. Beginning Q1 2013, the chart was replaced by a statement of the percentage change in fuel oil cost; this information too ceased to be provided beginning Q3 2014.

For a while, SP Services also provided the low-tension tariff components:


Presumably (I'm guessing also), SP Services wanted to show the public that rising fuel oil prices, rather than by other costs (mainly network charges by its sister company SP PowerGrid), were behind the increase in the low tension tariff.

Beginning Q2 2009, SP Services stopped identifying the fuel cost component:


As a result, the public is not given the information about how much the power generation companies are paid, over and above the cost of fuel.
 
Beginning Q2 2010, the words "power generation cost" were changed to "energy cost", which (contrary to what some people may think) is not the same as fuel cost.

Beginning Q3 2011, SP Services stopped providing the low tension tariff components in its press announcements, although it continues to provide the information on its website.

EMA continued to provide the low-tension tariff components (including fuel cost) until Q4 2011.

Presumably (I'm guessing also), someone thought that too much information was being provided to the public, which allowed the public to see how much the power generation companies were being paid to generate electricity, over and above the cost of fuel. Based on the 43,071 gigawatt-hours of electricity sold in 2013, every one cent per kWh of tariff adjustment costs consumers $430 million. The estimated non-fuel generation cost was approximately 7 cents per kWh for Q2 2012, or $3 billion a year.

No comments:

Post a Comment