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1 October 2009
I REFER to yesterday's report, 'Electricity prices up 12.5% from Oct'. The Energy Market Authority (EMA) liberalised the electricity market in 2001 to promote competition so consumers can buy electricity from retailers of their choice. Currently, only non-domestic consumers with high electricity consumption can buy from the six retailers. The timeline was that by 2003-2004, all consumers would have the right to choose how and from whom they wish to buy electricity. As it is already eight years since the liberalisation, can EMA indicate how long the wait until domestic consumers can have their choice? Andrew Seow Reply From EMA Electricity market liberalisation delayed by cost factor I REFER to Mr Andrew Seow's Forum Online letter last Thursday, 'When will consumers have a choice of electricity retailers?'. The Energy Market Authority's (EMA) objective is still to fully liberalise the electricity market so consumers will be able to buy electricity from retailers of their choice. So far, we have not been able to do so because of the high cost of servicing small accounts. For example, to enable retailers to sell directly to households, special meters which can record the usage of consumers at different periods are needed. But such meters cost more than 10 times as much as existing meters. For a typical household with a relatively small bill size, the savings from liberalisation would not outweigh this additional cost incurred. This is why EMA has embarked on studies to develop a more cost-effective platform for full retail competition. We expect to finalise our study soon, and if the results are positive, we will work out a plan to roll out the necessary metering infrastructure and progressively liberalise the market over the next three to five years. In the interim, EMA is exploring ways to get more benefits of competition to flow through to small consumers. Early next year, we will tender out a portion of the domestic electricity demand for the generation companies to bid on a competitive basis. With this tender, a portion of the tariff will be set by the tender price, thereby allowing more scope for competitive pricing of electricity for the benefit of households. Chung Puay Noi (Ms) |
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