There's potential for lower utility costs

IT is heartening that electricity rates here, both for homes and industries, have eased by some 10 per cent according to industry estimates, thanks largely to the intense competition among gencos, all under different owners, including foreign ones. Increased power supplies, including recently started liquefied natural gas imports, have helped.

But LNG supplies per se have not directly impacted power prices. It is just that Brent crude prices, to which LNG supplies are pegged, have eased recently. PNG prices, on the other hand, are pegged to high sulphur fuel oil prices. Simply put, consumers here have since July been paying for power generated using both PNG and LNG feedstock, which means they bought power on the back of a "blended" or combined PNG/LNG price.

Power aside, there is however, still the bugbear of other costly utilities, such as steam, needed by the petroleum/chemical plants on Jurong Island. Unlike in the case of electricity, such utilities, including cooling water, cannot be transported over long distances. There are also a limited number of such utility players on the island, with dedicated supply pipelines tying them to their respective customers, and vice-versa. From just Sembcorp originally, recent new suppliers of steam and other utilities like cooling water there are YTL PowerSeraya and Tuas Power, the latter from its new clean coal/biomass complex.