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SINGAPORE — Utilities firm SP Group, which manages the centralised cooling system in Tengah town, will waive usage charges for the system until Dec 31 and lower the rate from Jan 1 in response to an outcry from residents.
A petition signed by more than 150 Tengah residents was sent to Prime Minister Lee Hsien Loong on Oct 27. In the e-mail seen by The Straits Times, the residents raised concerns about "excessive charges" the system incurs, as well as the fees imposed on those who wish to cancel their contract.
SP Group said on Monday (Nov 6) that it is aware of the feedback from residents and has been working with them to address their concerns.
Tengah, an eco-friendly and car-lite "forest" town, is the first Housing Board estate to provide a centralised cooling system as an option for home owners.
The system uses chilled water to remove heat, unlike conventional air-conditioning units that are connected to outdoor compressors and use refrigerants to cool down flats. Centralised chillers on the blocks' rooftops produce chilled water that is piped directly into homes.
Residents are billed for the chilled water and electricity usage of the cooling system each month.
One of the issues the residents highlighted was that the chilled water usage rate of 20.38 cents per kilowatt-hour refrigeration (kWrh) for the period of October to December was higher than expected. They requested that the rate be lowered.
SP replied that the usage rate for the cooling system is reviewed and adjusted quarterly. In 2020, the rate was estimated to be nine cents per kWrh, based on the electricity tariff then, planned costs for the project and cooling energy consumption.
It said the rate went up as electricity costs surged nearly 50 per cent from 2020 to 2023, while the cost of the project rose by 20 per cent due to the Covid-19 pandemic.
Residents were also unhappy that SP had earlier adjusted the cooling system's life-cycle cost savings from 30 per cent to 17 per cent on the myTengah website, which it runs.
Life-cycle cost savings are calculated based on a 20-year period.
SP said: "The increase in the usage charge rate (in the fourth quarter of 2023) will have some impact on the initial estimate of up to 30 per cent savings of the centralised cooling system."
As a gesture of goodwill, SP said it will waive all usage charges for Tengah residents until Dec 31.
It will also adjust the usage rate to 13.2 cents per kWrh (before goods and services tax) from Jan 1. This is because some residents have already moved into their Tengah flats, and SP said it was able to review its rate with the usage data.
"With the adjustment... customers will be able to enjoy life-cycle savings of up to 30 per cent versus a conventional split unit air-conditioning over a 20-year period," SP added.
The residents also asked for more clarity on the cancellation fee for those who wish to opt out of the centralised cooling system, and requested that the fee be waived entirely.
SP said that after residents sign the agreement to install the fan coil unit, pipes and cables in their flat, they can end the agreement without any penalty within 30 days.
Should residents wish to cancel their contract more than 30 days after signing the installation agreement, SP will collect 35 per cent of the installation charge from them.
The installation charge for four fan coil units, for instance, is $3,992.
But if the system has been installed, residents would have to pay the full installation fee if they want to cancel the agreement.
"Nonetheless, taking into account feedback from this early batch of customers and the initial issues encountered, as a further gesture of goodwill, SP will reduce the payment to be collected by 50 per cent in the event of cancellation," SP said.
One of the Tengah residents who signed the petition and wanted to be known only as Lin said that the adjusted usage rate of 13.2 cents per kWrh was welcome.
However, the Plantation Acres resident who will be collecting the keys to his five-room flat next week said he is still thinking of ending his contract.
The 38-year-old executive said: "For all we know, this could be the best rate we'll ever get. If SP can adjust the rate so drastically, how do we know that they won't adjust it again?"
ST reported earlier that the centralised cooling system in Tengah had run into teething problems with the first batch of residents, with some saying the system in their units was not cold enough.
On Monday, SP said that 470 out of 536 reported defects have been resolved by Oct 27. It added that it is working to rectify the remaining 66 defects as soon as possible.
An HDB spokeswoman said the public housing authority is aware of the feedback from some Tengah residents.
"HDB will continue to monitor the feedback on the centralised cooling system and support SP Group to ensure that the roll-out of the system in Tengah proceeds as smoothly as possible," she added.
As at Monday, the keys to about 1,109 of the 2,333 units in Plantation Acres and Plantation Grange — the first two projects in Tengah — have been collected.
SP said it will work to raise awareness among residents about the cooling system and address teething issues.
"We apologise that our service delivery and communications with customers have fallen short of expectations," it added.
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This article was first published in The Straits Times. Permission required for reproduction.