Saturday, August 30, 2008

Electricity and Profits...


"As of June this year, about 13,700 household have been put on pre-paid metering scheme...."
- Straits Times 29 Aug 2008
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"" The minimum amount for topping-up is S$10 and the maximum is S$250. At every top-up, 20% of the top-up amount will be deducted to pay for the arrears and 80% of the top-up amount will be credited on the smart key." - SP Power Website
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I don't know why other countries give the poor a subsidised utilities rate that they can afford with their lower wages when they can simply copy the PAP govt idea of pre-paid electricity. The idea is very simple - as Singapore Power increases its tariffs to preserve its profits, electricity becomes unaffordable for many Singapore families. The usual mantra is to blame the poor folks for using too much electricity and asking them to cut down. However, if after living in relative darkness at night, watching only 1 hour of TV and occasionally turning on their fans to beat the heat...they still cannot make ends meet and pay their electricity bill, Singapore Power will cut off their electricity rather than risk its profits. A meter will be installed at the person's home so that he can have electricity only after he pays up. So where does the person get the money to pre-pay for his electricity? I guess he can cut down on other things like food and transport.....the price of which has been raised to encourage them to use less.
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Welfare is a dirty word....but reducing the profits of GLCs such as Singapore Power is even more forbidden. Those who talk about it deserve to be accused of engaging in the politics of jealousy. Singapore Power tells us that it needs to increase tariffs to preserve its profits because price of oil has been rising. The thing is Singapore's electricity is generated using natural gas whose price until recently has been fairly stable/flat however somebody signed a contract with the Indonesians to link the natural gas supplied to Singapore Power to the price of oil. Anyway cost has been increasing and they need to pass this on to Singaporeans. It is indeed important to keep Singapore Power profitable. How profitable is profitable? Singapore Power has made enough to acquire several Australian companies PowerNet and Alinta in multi-billion$ deals. Just imagine that Singapore Power makes enough from Singaporeans to acquire the major power suppliers in Australia a nation several times the size of Singapore. The profit that Singapore Power makes is not just enough to upgrade its power plants in Singapore but there is enough left for large overseas acquisitions. However, it doesn't seem to have enough to fund a low tarrif programmes for the poorest Singaporeans who have contributed to its profits over the decades.
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Singaporeans should feel proud of our monopolistic GLCs. Unlike other countries which require similar companies to return excess risk free profits to the citizens, our GLCs have been able to use the money to grow overseas and create top jobs for the power elites in our society. When you fall on hard times and the Singapore Power man comes over to install the pre-payment meters at your home and you have no money to turn on the heater for your shower, remember that it is cold in Switzerland and that cold shower is one step closer to the Swiss standard of living the PAP promised to the people a few years ago.

38 comments:

yamizi said...

Being poor is a sin in Singapoe.

LuckySingaporean said...

Yamizi,

Whatever you do, try not to sin!

Onlooker said...

But we are all sin.
Especially when we eat(rice hike),pass under the gantry, need to study(fee hike) and go to work(tarman say no increase).
The only people who are not sin are those who have pay hike(increase to $$$million$$$) in advance regardless if they do their job or not.
EG error Lee Bee Wah.

Anonymous said...

this remind me of the story of a SINgapore girl who left SIN and committed the ultimate moral disgrace with 70 men. naturally, her immoral conduct received the utmost condemnation from SIN. when asked why the foolish act, she said she did it out of rebellion. rebelling against a repressive and hypocritical society - SIN.

probably most are already familiar with the story and so to cut it short, the girl has since grown into a beautiful swan after leaving the 70 men who helped her along the way. her invaluable change was only possible because she had left - SIN.

in leaving SIN, she became GRACE personified.

now what is SIN about really?

Anonymous said...

behind the veiled face is... jesus? lol.

Anonymous said...

Soup kitchen for the poor?

Anonymous said...

when is this going to end,,,,,,sigh

Anonymous said...

who can hear, see and lick?

they didn't call it the law of SIN and DEATH for nothing.

Anonymous said...

MM
MMMMMMMMM
MMMMMMMMMMMMMMM

no end for lovely MMMMMMMMMMoooooooneeee for...

Mib,Mim and MMMMMMMMiw

Anonymous said...

Not only Spower but also SMRT, ComfortDelGro etc can always increase their fares by using the "cannot-go-wrong" reason of losing profits.....

See....they are always telling the truth because even when they are making more and more profits each year, their logic is that the revenue should/could have been more hence they are always "losing" profits!!!! Get the picture now??!!

What a wonderful country I'm in and I beseech every 100% Singaporean (non-FT or PR converted posers please) to continue to vote for PAP to enjoy the evidently "Swiss Standard" of living.

Anonymous said...

S'pore is a profit centre leh. U tot it's a half-way house for the havenots.

Anonymous said...

ha ha ha

Anonymous said...

Vote for the PAPEE some more lah. . . see what they are now doing to you folks . . . got yourself to blame only anyway. . . used to vote for them until last GE . . . no more these robbers to do what they like, enough is enoughxxxxx

Anonymous said...

In the Matrix, we are nothing but digits and human batteries for our Garment Master. They continue to enjoy themselves while many singaporean are working hard and worrying about their daily living.

Sometimes, I wonder whether does Karma truely exist.

Anonymous said...

They are terribly efficient at making money, but no good at earning respects.

patriot

Anonymous said...

remember that it is cold in Switzerland and that cold shower is one step closer to the Swiss standard of living the PAP promised to the people a few years ago

lol

Anonymous said...

we are living in disneyland. everyday, we have people in costumes playing out FANTASY ROLES so you can be happy for the moment that your entrance ticket allows you.

the last i read, people in costumes picketed for pay rise.

so either you are in disneyland or you are in the real world.

Anonymous said...

imagine, her story could have a tragic ending.if she had returned to SIN. she would have died from stones because, SIN despised her. SIN was ashamed of her. SIN continued to remind people of her shame. SIN treated her like a mother's freak. but then, SIN has no qualms in capitalizing her story for money. all SIN wanted to do was to use her to keep people under the control of SIN's moral laws.

Anonymous said...

but hallelujah....thanks be to her bush.... in the land of the free, she walked freely, she lived freely and loved freely. not knowing to many though, her change or transformation was GRACE realized. her unique journey in life could never have been possible in SIN, which makes her very very special and precious in the eyes of her maker for had SIN not killed her, GRACE would not have revived and so GRACE paved a new life for her.

Anonymous said...

they have a good leader in bush.

LOL

Anonymous said...

Its time for poor Singaporeans to get acquainted with micro-economics 101.

Optimal price is when demand curve meets the supply curve. We can't go higher or lower coz it will lead to market inefficiency.

Are there many poor singaporeans who can't meet this price? From the article it seems so.

Singapore is unique in this whole world because NO OTHER COUNTRY has the mantra "WELFARE is a DIRTY word". What does this mantra means? It means if you can't pay the price, you are on your own. As simple as that. I can't explain it any SIMPLER.

Welfare is the manifestation of a GRACIOUS & COMPASSIONATE society.

I don't understand the Singapore policy makers' mentality. What's the use of studying in Oxford and Cambridge when they are taught the solutions to drawbacks in market economy but does NOT implement it when they returned to Singapore. It is one of the greatest mystery of this world.

Another BIG mystery to me is why most Singaporeans think that it is good to have ONE and ONLY ONE political party to represent them?

Cheers
Economist with a heart :)

Anonymous said...

i see lucky is very knowledgble about SIN to advise :)

bush is on fire. obama for president!!

Anonymous said...

"Another BIG mystery to me is why most Singaporeans think that it is good to have ONE and ONLY ONE political party to represent them?"

ask the people from Tan S.A. synagogues( remember to pay 10% token for the answer). there is a minister by that surname could be the clue to the mystery.

and btw, whose party is it? got someone pop up from the cake or not?

Anonymous said...

ever watched one of those black and white tv dramas of american life in little town where everybody knows everybody...economic life was simple and they have very friendly sheriffs to keep law and order?

and toadheads must model after NY and london

but then, the latter gives the best buck for toadheads LOL

not very 'toad' huh? LOL

Anonymous said...

It's a big irony to hear PM talk about a gracious society. This must start from the top ie. the govt. Look at how we treat the havenots here in Singapore.

A gracious society will NEVER take place in Singapore as long as the govt behaves in their high and mighty ways. When was the last time you saw a senior stateman show an act of grace?

Grace is doing something good even one has the right to do something bad. Example; impose a prepaid system for electricity on the poor. I long to see one of our ministers step against the grain of things, and say to the poor, 'Don't worry, our country is doing well and will good take care of you, even if you are a havenot'. Once we do things like these, trust me... people will automatically clear their trays at the food courts and give way to other fellow roadusers who want to switch lanes!

My dream remains a dream... for now

Anonymous said...

Anybody watch Obama's acceptance speech?

http://www.youtube.com/watch?v=_PQiL4i54jM&NR=1
(part one, there are five parts)

Not only he's an excellent speaker, I find some points in his speech are relevant to Sg: 'you're on your own' policy, change in Washington, Washington's fear tactics, etc...

Anonymous said...

hi Anon 12:16, I don't understand. What's Tan S.A.

"ask the people from Tan S.A. synagogues( remember to pay 10% token for the answer). there is a minister by that surname could be the clue to the mystery."

Thanks for your answer

Anonymous said...

someone will have to write a theological treatise and it will be banned,burnt and the author crucified.

Tan S.A. won't allow it. His servants, who have sold themselves to him and collecting Tan's wages has in history, committed angels to the stakes

Tan S.A. is today a successful production factory for harry bush. you can say...they are partners Inc.

Better not go there....safer to serve...harry bush. :)

that way, your shops stay opened and you get to collect your 10%

Anonymous said...

those who serve SIN are often called..SIN citizens. that's too long.

shorter better.


SINNERS...HAHAHHAHAAAAAAAAAAAAAA

jackie said...

ha ha, can't believe some of you made these comments...lol

Chee Wai Lee said...

This topic brought to mind an interesting comparison to utilities in the US.

Like in Singapore, utility companies in the US (I believe) are de-facto monopolies. Illinois Power provides gas and power to households and apartments in my town of Champaign-Urbana. I know of no other company that would step in should I "choose" not to go with Illinois Power.

Like in Singapore, profits matter to these companies. They are, afterall, private companies.

Strangely enough, that is where the similarities end.

As I understand it, Illinois Power is willing to let payments slide should you be unable to pay because of cash flow issues. Of course, you pay interest and your credit rating is affected. I've not been home for a while, so I do not know if utilities get cut the moment you default. Here, they care about the fact that if they turn off power or the gas, people can die from the cold or the heat. Losing food in refrigerators can become a health hazard. In fact, Illinois Power cares enough to include an option for paying customers to add an extra dollar in their payments to help the needy get power.

Another difference I perceive (not held up by fact) is that customers do matter (even though the companies are effective monopolies). One time we chalked up a US$800 which we challenged because it was so abnormal (turns out it might have been justified ... everyone left the house with the thermostat set at around 25C in the midst of a very cold winter). We were offered an alternative bill based on a guess of our previous winter bills. No questions asked. Profits were important, and the company even had meter readings on their side but they were willing to write the matter off and please us even though we had no realistic way of turning to other sources of power. I seriously do not see this happening in Singapore. To US companies, the thinking would be "these are rare occurrences, whether we are right or not, just let it be". In Singapore, I believe the thinking is more of "what if everyone does it?".

LuckySingaporean said...

chee wai lee,

You have been badly seduced by the weak American culture. It is a moral hazard to allow people to continue having electricity when they have arrears.

Our Pay As You Use scheme which we put our poorest citizens is just excellent. If they mess up and don't top up the meter, the food in their fridge will go bad ...and the hunger will teach them something.

Without constantly increasing the tariffs regardless of what the low income can afford, Sp Power wouldn't have accumulated enough profits to buy Sp AusNet, PowerNet and all these great foreign assets that we can be proud of.

There are a few more holes in the American system which you might not have discovered. As a student on scholarship(?), your monthly allowance qualifies you to be a low income earner. I'm not sure about now but 10 years ago, they will allow you go get a social security number and that qualifies you for low utilities rate. ...they don't even care if you're a foreigner. If you're married with a newborn, you can walk into any WIC (woman infant child) and get free food coupons. They don't even care if you're illegal.

The americans are only half bake capitalists tainted by socialist compassion, Singapore (govt?) we the true capitalists - unbridled and unhindered profits...we go all the way!

Anonymous said...

Three cheers for Singapore Inc!!! The place where workers (citizens....and nowadays FTs) get to work for their bread under the benevolence of our board of directors (gahmen and social elites).

From a conscripted citizen (what to do....I did not have a say on where to be born in)

Bottomline? Work till die or join another company (country) with a better workers' benefit scheme lor.

Anonymous said...

Does it feel like Asian Crisis Part 2?

LuckySingaporean said...

anon 4:49,

I've been watching this downturn very closely. I think the crisis phase is over and we are entering a recession. While we are globalised which means many countries will be affected, Asian countries are in a good position to shoulder this one. The strange thing is the epicenter which is the US seems to be holding out but UK and Europe is sliding faster. For UK the property and finance sector is a larger component of its economy than US.

There a few silver linings but it does not mean we are out of the woods:

1. Crisis management by Benanke and Paulson has been outstanding. They were caught behind the curve and jump ahead to take control.

2. The is a lot more coorperation and coordination among central banks.

3. Inflation which was a big problem early this year is waning.

4. There is some sign that the US housing market is bottoming out. The homebuilder stocks have gone up a lot and yesterday Home Depot CEO said he sense a bottoming...

5. Fannie and Freddie appear to have stabilised and are able to raise funds.

6. A slowdown will help China put its economy on a more sustainable track.

7. Given what the US economy went through, it is losing jobs "very slowly". That could be because the economy is largely services...I remember the 2003-2006 recovery they put on jobs very slowly so they are losing it slowly.

We have move from a crisis situation to a global slowdown. There will be job losses but the we should be able to weather this.....I hope!

Anonymous said...

Hi Lucky

In 1997, US was largely unscathed too.

"Crisis management by Benanke and Paulson has been outstanding."

I believe you are in the minority but my judgement could be clouded by my dislike of Paulson and his GS pals. Plus I am a Liberal.

The Asian countries are very much export oriented and will be badly hit by global slowdown.

Indeed we are seeing another attack on the Won and Thailand is setting themselves up again.

China cannot afford a dramatic slowdown either. (This I am very sure).

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