Open Electricity Market gives consumers choice

14 Jan 2019

We thank Mr Hoe Lye Soon for his letter on the Open Electricity Market (OEM) (Keep buying of electricity simple; Jan 5). The OEM aims to give consumers more choices when buying electricity.

Consumers who prefer to buy electricity from SP Group at the regulated tariff can continue to do so as it is not compulsory to switch and there is no deadline for switching.

Regardless of their choice, consumers will continue to enjoy the same reliable electricity supply.

There is strong competition in the Open Electricity Market.

Electricity retailers have to minimise costs and offer competitive price plans.

Consumers who have switched pay an electricity rate which is on average about 20 per cent lower than the regulated tariff.

Those who wish to switch can start by comparing the standard price plans offered by the electricity retailers using the Price Comparison Tool available at
compare.openelectricitymarket.sg

When they are ready to sign up, they can do so online through the retailer's website.

The retailer will then work with SP Group to effect the switch.

Household consumers can also choose to use an advanced meter to monitor half-hourly electricity consumption data via a mobile application.

Retailers will be able to advise customers on this option.

The Energy Market Authority will continue to engage consumers to help them make informed electricity purchase decisions.

Ms Dorcas Tan
Director
Market Development & Surveillance Department
Energy Market Authority

Keep buying of electricity simple – Hoe Lye Soon
5 January 2019

It is odd that only 30 per cent of eligible consumers have switched from the current incumbent SP Group to the electricity retailers (1 in 3 eligible consumers switches to electricity retailer; Dec 30, 2018).

The Energy Market Authority (EMA) expects this take-up rate to stay the same as the roll-out stretches across the island.

For a scheme that is touted to reduce consumers' electricity bills, this surely cannot be right; one expects the take-up rate to be more than 50 per cent as a minimum. This could mean consumers either are indifferent, or cannot understand or see the purpose of the scheme.

A pertinent question is: What value do the 13 electricity retailers bring to the table, especially as they do not produce electricity and are also not responsible for the reliability and performance of the electricity supply?

With 13 retailers, it would be logical to conclude that operating, administration and marketing costs would actually increase and the burden is going to fall on the consumers.

In a liberalised market, certainly large organisations including the larger estates will seek group discount rates, resulting in multi-tier rates with the smaller estates or individuals paying top-tier rates.

Let's keep the buying of electricity, a non-differentiated and essential product, simple.

Consumers want a simple system without having to spend much time trying to search for the "best rate".

In this Internet age, I reckon what consumers want is real-time monitoring of their electricity usage. Perhaps EMA could look into the replacement of the electricity meters that have remained the same for ages.

With real-time metering, we eliminate the need for a person to read the meter and, more importantly, the massive data collected (down to the individual households) will be a treasure trove for economic and other applications.
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