We refer to Mr Tan Teck Lee's letter in which he asked about how electricity retailers are licensed and whether consumers are protected when a retailer exits the Open Electricity Market (Protect consumers against electricity retailers that pull out; Jan 10).

The Energy Market Authority (EMA) assesses all electricity retail licence applications stringently. The assessment criteria include management expertise, financial capability, risk management, customer service management and compliance with rules and regulations.

Participation in the Open Electricity Market (OEM) is not mandatory.

Retailers who wish to participate are required to undergo further evaluation and fulfil additional requirements set by EMA.

EMA has measures in place to protect consumers should a retailer exit the market. Consumers will not face any disruption to their electricity supply as their accounts will be automatically transferred back to SP Group.

Consumers can also choose to switch to another retailer of their choice.

Residential customers' security deposits are protected by business insurance or banker's guarantees, and will be refunded to them after outstanding charges are deducted. In addition, the exiting retailer is not allowed to collect early contract termination charges from their customers.

Dorcas Tan Director
Market Development & Surveillance Department
Energy Market Authority

Protect consumers against electricity retailers that pull out (10 Jan 2019, Straits Times)


It is disappointing that electricity retailer Red Dot Power has thrown in the towel even before the game had begun (Red Dot Power exits electricity market in S'pore; Jan 5).

I question how the Energy Market Authority (EMA) issues licences to electricity retailers.

Why are there only 13 retailers participating in the open electricity market (OEM) when there are 22 electricity retailers in Singapore?

Is there a penalty for retailers who decide not to participate in the OEM?

Also, is there any penalty for retailers like Red Dot Power who exit the market after signing up customers? Since the company cited financial challenges for its departure, I would like to know how EMA evaluates the financial status and viability of a retailer before issuing it a license.

The standard process when a retailer ceases operations is for customers' accounts to be transferred to the SP Group, where they will be billed according to the regulated tariff.

The customer may therefore not receive the electricity rates promised by the now-defunct retailer.

I suggest that EMA appoint an agent to honour the electricity rates until the end of the contract signed, should a retailer cease operations.

Tan Teck Lee