Straits Times: Consider tiered charge in electricity tariff

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I REFER to Monday’s letter by Mr Paul Chan, “Electricity prices: 82% higher here than in Hong Kong”.

Mr Chan’s query about the price of electricity in Hong Kong and Singapore is partly answered by the fact that Hong Kong produces electricity largely from coal, and hence the impact of volatile fuel prices is not as amplified as it is here.

However, the unanswered part which the Singapore authorities should seriously consider is that Hong Kong has a system of tiered charging for electricity based on consumption.

Thus, for the first 150 units of electricity consumed, the rate is about $18. Progressively as consumption increases, the tariff rate goes up, so those who consume more electricity pay for additional units at a higher rate.

Such a tiered charging system has several benefits:

• It ensures there is a humane rate for baseline consumption, while those who can afford it can consume more;

• At the same time, it is green – encouraging everyone to save electricity so as not to cross to the next tier and be charged at a higher rate.

Indeed, tiered charging is already in place in Singapore for water.

At the parliamentary sitting on Oct 21, I raised this suggestion which the Ministry of Trade and Industry seemed reluctant to pursue.

The other issue alluded to by Mr Chan is the lack of transparency surrounding the tariff formula.

At the same sitting, I asked whether the electricity tariff formula was a state secret and if the full details of the formula would be published. The answer was that the Energy Market Authority would be happy to oblige, subject to considerations of commercial confidentiality.

Electricity prices have risen more than 50 per cent since January last year and have doubled since January 2004. We await the ministry’s response.

Sylvia Lim (Ms)
Non-Constituency Member of Parliament

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