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This report summarises EMA’s determination of the LRMC parameters used to setthe vesting price for the period 1 January 2009 to 31 December 2010, in accordance with the established procedures set out in the document “EMA’s Procedures for Calculating the Components of the Vesting Contracts”. In this determination, EMA took into consideration the recommendations of itsconsultant, KEMA International BV (“KEMA”) and the feedback received during consultation with the public and industry.
The consultation has closed for comments.
Vesting contracts were implemented on 1 January 2004. The vesting contracts commit the generation companies to sell a specified amount ofelectricity at a specified price and thereby prevent gencos from exercising their market power to drive up prices. The specified price under the vesting contract i.e. vesting price is set at the long run marginal cost (LRMC) of the most efficient technology that accounts for at least 25% of our system demand. At this time the most efficient generation technology is thecombined cycle gas turbine (CCGT).
EMA invites comments and feedback on its draft report for the review of the Weighted Average Cost Of Capital (WACC) Parameters (i.e. excluding theTechnical Parameters) for setting the vesting price for the period 1 January 2009 to 31 December 2010 as set out in the Appendix.
Please send your submission by e-mail to: wong_mui_quee@ema.gov.sg, teo_nan_shing@ema.gov.sg, lee_ming_tao@ema.gov.sg. Alternatively, you may send your submission by post/fax to the following address:
Director (Market) Regulation Division
Energy Market Authority
111 Somerset Road, #15-05
Singapore 238164
Fax: (65) 6 835 8084
All comments and feedback must reach EMA by 5 pm on 5 September 2008.
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