I have never scrutinized my electricity bill so closely until recently when it was announced that households and businesses island-wide will be able to choose their electricity provider.
What will mean for me as a consumer? Will I pay less? If I change provider will I face a disruption? Who are the retailers and what sort of plans are out there? Got such thing ah?
It took me a while to wrap my head around the concept as it confused me to no end how SingNet, which provides me with my household Internet, could do the electrifying job that SP Group has always been doing.
Aha! But it can, and here’s why:
What is the Open Electricity Market?
Three years ago, it was announced that we would be able to choose our electricity provider come 2018, under a fully liberalized electricity market.
Even further back, since 2001, the Energy Market Authority (EMA) has been progressively opening the retail electricity market to competition. Up till now, only business consumers that used at least 2,000 kWh (equivalent to a $400 monthly bill) could exercise this option, rather than buy electricity from SP Group at the regulated tariff.
You probably have some friends living in Jurong who may have already switched providers, or you may have chanced upon booths of electricity suppliers asking you to jump ship. That was the soft launch of the Open Electricity Market (OEM), which began on 1 April 2018.
And from 1 November 2018, more households will get the power (pun intended) to choose from 12 providers to date. By 1 May 2019, this liberalisation will be nationwide and available to all of Singapore’s 1.4 million electricity consumers.
What happens if I do nothing? What happens if I switch? Will my electricity be cut off?
If you take no action, everything remains status quo. You will continue to be subscribed to SP Group and will pay for electricity at the regulated tariff. Switching is not compulsory and there is no deadline. It’s just the opening up of more options for consumers should we wish to exercise our right to choose a provider that better fits our needs.
The tariff, regulated by the EMA, is revised every three months to reflect the actual cost of electricity. The current electricity tariff (1 July to 30 Sept 2018) is 23.65 cents/kWh, before GST. My latest SP Group bill shows a total charge of $39.73 for 168 kWh, before GST.
Just think of it like switching from Singtel to M1, and then to StarHub or Circles.Life when your corresponding mobile phone contract is up. The infrastructure is still the same, but the way the customer service officer greets you on the phone, the user interface of the website, or the plans available may differ.
Already, since the launch of the OEM pilot, over 30% of Jurong’s 108,000 residential and 9,500 commercial electricity consumers have switched providers. Don’t worry, if you switch and are not satisfied, you can change provider once your plan is up or even go back to SP Group. Of course, do check out the retailer’s early termination charges or other fees in advance.
And don’t worry about a supply disruption as the electricity will be delivered via our reliable national power grid, which will still be operated by SP Group. But if you are changing your meter, there will be a temporary supply disruption of up to 30 minutes while SP Group does the installation.
Likewise, if you switch provider, you will still continue to enjoy U-Save rebates. This guide on the OEM website has more information on switching, along with a snazzy infographic. In addition, consumers will receive a notification package and information booklet.
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Two types of electricity providers
There are two kinds (or three, if you count SP Group) among the 12 OEM retailers:
- Those that generate their own electricity
- Those that are electricity retailers
Power generation companies produce their own electricity and have better control of the prices they pass onto consumers. On the other hand, retailers buy electricity wholesale and are subject to market forces.
Logic has it that the power generation companies’ should have cheaper options, but after the complete roll-out, things may change due to the many competing retailers.
What types of price plans are available?
Previously, there were three types of price plans available:
- Fixed Price Plan
- Discount Off the Regulated Tariff Plan
- Peak/Off-Peak Plan (now removed)
But thanks to our early adopter friends in Jurong, they gave feedback that they were overwhelmed by the number of retailers and wide variety plans offered, according to a CNA report. So, the EMA removed option 3 to make things simpler (sometimes too much choice also headache).
For the fixed price plan, we need only pay a flat price during our contract duration, which may or may not be cheaper than the regulated tariff. If we are heng (lucky), then we will tan tio (gain), but if we are suay (unlucky), then we will rugi (lose out).
For example, at the current regulated electricity tariff (1 July to 30 Sept 2018) of 23.65 cents/kWh, perhaps the retailer I switched to is offering 20 cents/kWh flat for 24 months. So I sign on as it is cheaper than what I am currently paying. But in 4Q 2018, the regulated electricity tariff dips to 18 cents/kWh, so I am now paying more per month. And then in 1Q 2019, it increases to 22 cents/kWh so I pay less per month again.
Why should you get this over SP Group’s regulated tariff, which is technically also fixed each quarter? Well, I would if after checking the regulated tariff history/trend on my bill or on the SP website, I find the retailer is generally significantly cheaper than what I am currently paying and/or still cheaper than the lowest regulated tariff I’ve paid so far.
At least I will have peace of mind for 24 months that the rate will be locked in at that fixed rate, even if the regulated electricity tariffs suddenly shoot skyward. My bill size will be fixed, and that will really help with my budgeting. If 24 months is too long and you are unsure about this commitment, other retailers are offering 6- and 12-month fixed price plans.
For the discount off regulated tariff price plans, they will still be pegged to the regulated tariffs that SP Group charges, but always at a discount. So you will definitely be paying slightly less than what you would normally pay. A cheaper bill is guaranteed, but may not be the cheapest, as compared to a great score on the fixed price plan.
For example, again based on the current regulated electricity tariff (1 July to 30 Sept 2018) of 23.65 cents/kWh, a retailer may offer a unit discount of 20% off the regulated tariff. So I will pay 18.92 cents/kWh per month instead for July, August, and September. Hypothetically, if the regulated tariff for 4Q 2018 changes to 25 cents/kWh, I will still get the same discount, and pay 20 cents/kWh per month for October, November, and December.
Why would I choose this plan? Well, there’s surety that I will definitely pay less than what I am paying to SP Group every month.
Read also: 4 Small Mindset Changes That Can Help You Up Your Savings Game
Important factors other than price
I know that we tend to be very pragmatic, but cheaper may not always be better.
Some factors I would also look at include:
- The term of commitment – do I want to commit for 24 months, 12 months or 6 months? Maybe I don’t like the provider’s service after all, or I want to have the agility to switch to a better (cheaper) plan if there is a more attractive offer.
- Convenience – some retailers have the option to bill you directly or via SP Group. Honestly, I’ll pick the latter, because I find it so easy to just have my electricity, water and gas charges in one consolidated bill.
- The frills – just like how your telco can entice you to switch based on special promotions, price plans, flexibility and quality of customer service, green energy, absorption of transmission loss, do look at the perks/bundles/products/incentives that your electricity retailer is offering.
- The terms and conditions – ah yes, the contractual T&C can be a deal breaker. Always read the T&C especially the clause on termination. If in the event you really need to terminate your plan early, at least you are aware of the extra charges you will incur. And if you are not comfortable with any aspect of the T&C, don’t sign up for that retailer, no matter how attractive it is. It may save you a major headache later, and the difference may just be a few cents!
- Word of mouth – I also like to go by the tried and tested route, so if the reviews for a certain provider is good, I am more likely to shortlist it. Read forums, talk to friends and family, see comments on social media, read the news, etc if this aspect is as important to you as it is to me.
- And always remember to buy electricity from retailers participating in the OEM, as authorized by EMA.
A quick comparison of electricity retailers – residential (as of Sept 2018)
|FIXED PRICE PLAN
|FIXED PRICE PLAN
|FIXED PRICE PLAN
|DISCOUNT OFF REGULATED TARIFF
|DISCOUNT OFF REGULATED TARIFF
|DISCOUNT OFF REGULATED TARIFF
OTHER FEES & CHARGES / NOTES
|Best Electricity Supply||16.38 cents per kWh||17.50 cents per kWh||16.28 cents per kWh||23%||18%||N/A||Refer to fact sheet
Upfront cash rebates available, security deposit only collected on the first bill (no upfront deposits)
|Environmental Solutions (Asia)||TBC||TBC||TBC||TBC||TBC||TBC||Carbon neutral electricity at zero additional cost,|
|iSwitch||17.50 cents per kWh||17.80 cents per kWh||N/A||20%||19%||N/A||Refer to fact sheet
Security deposit equivalent to one month’s bill; perks like free iPad or aircon servicing; 36-month green energy plan at 18% DOT available
|Keppel Electric||16.50 cents per kWh||16.80 cents per kWh||17.07 cents per kWh||21%||N/A||N/A||Loss-adjusted consumption, free gifts, no security deposit|
|Ohm Energy||16.95 cents per kWh||17.95 cents per kWh||18.15 cents per kWh||N/A||22%||20%||3-month trial available, absorbing transmission loss, the fee for CO2 Offset: 0.5 cents/kWH, referral programme, no-contract plans available|
|PacificLight Energy||17.78 cents per kWh||N/A||N/A||18%||N/A||N/A||Rebate/security deposit waiver with UOB Cards till 30 Nov 2018, e-billing discount, prompt payment promotion|
|Sembcorp Power||16.50 cents per kWh||16.80 cents per kWh||N/A||23.5%||20%||N/A||E-billing only, paper billing at $1/bill, complimentary home insurance, flat fee plans capped at certain kWh per month available|
|Senoko Energy Supply||17.18 cents per kWh (online promo till 31 Oct 2018)||17.99 cents per kWh||N/A||17.25%
(till 15 Nov 2018)
(till 15 Nov 2018)
|N/A||Transmission loss factor absorbed, earn Linkpoints, earn rebate for recurring payment on UOB/OCBC cards, no security deposit or registration fee|
|Seraya Energy (Geneco)||16.20 cents per kWh||17.80 cents per kWh||N/A||21%||19%||23.8%||No transmission loss charges, Carbon tax inclusive, No security deposit, $40 AMI Installation fees waived|
|Tuas Power Supply||18.8 cents per kWh||N/A||N/A||16%||N/A||10%||Free The Straits Times Digital subscription, integrated SP bill with no additional security deposit, earn 1 LinkPoint for every 8kWh used, special discounts available i.e. first month free, 36-month plan available at 16.8 cents/kWh|
Note: you can use compare.openelectricitymarket.sg, but do visit the individual sites for the full, updated price plans and other perks. Information correct as of 26 September 2018.
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