Consumers’ interests are protected in Open Electricity Market
06 Oct 2018
We thank Mr Paul Chan Poh Hoi for his questions with regard to buying electricity from retailers in the Open Electricity Market (“Concerns about new option to switch power retailers”, 29 Sep).
The Open Electricity Market gives consumers a choice to buy electricity from a retailer or to remain with SP Group. The regulated tariff, charged by SP Group and approved by the Energy Market Authority (EMA), is set based on a fixed formula that reflects the long-term costs to produce and deliver electricity in Singapore. Retailers, however, set their price plans based on their own business strategies and may adjust their prices over time to adapt to factors such as prevailing market conditions and level of competition.
Household consumers, after switching to a retailer of their choice, may subsequently switch back to buy electricity from SP Group at the regulated tariff. While SP Group does not charge a fee for switching back, consumers should check with their retailers if there are any applicable charges such as early contract termination fees imposed by their retailers. If a retailer ceases operations, its customers’ accounts will automatically be transferred to SP Group at no extra cost and they will be billed according to the prevailing regulated tariff. Consumers who do not wish to be transferred to SP Group can submit a request to be transferred to another retailer of their choice. They should check if their new retailers will impose any charges such as registration fees. There will be no disruption to electricity supply during the switching process.
It is not mandatory for retailers to collect security deposits and there are retailers who do not do so. Should a retailer collect security deposits from household consumers, EMA requires the retailer to safeguard and return the security deposits when the need arises.
We encourage consumers to visit www.openelectricitymarket.sg for more information and use the price comparison tool to help them make informed decisions.
Mr Soh Sai Bor
Assistant Chief Executive (Economic Regulation)
Energy Market Authority
Concerns about new option to switch power retailers - Paul Chan Poh Hoi (The Straits Times)
29 Sept 2018
As a consumer, I find the property analogy for explaining the electricity prices relatable (All households, firms to get choice of power retailer; and What you need to know about the market; both on Sept 22).
The electricity retailers offer three types of contract periods: six, 12 and 24 months, with choices of fixed and discounted rates.
For example, if I switch to a fixed price of 16.20 cents per kilowatt hour in a 24-month contract instead of paying the current price of 23.65 cents per kwh, I could save more than 25 per cent on my bill and not worry about oil price fluctuations and carbon taxes.
However, some retailers may pull out as competition becomes more severe. And I have some concerns.
It seems that there are no extra charges for households that switch from SP Group to another retailer, as there is no need to change the meters. What happens if these households subsequently switch retailers again?
There is no guarantee that electricity rates offered by retailers will remain at the current level. As the Energy Market Authority is the regulator, will it guarantee that there is always a differential between retailer prices and regulated tariff?
In case a retailer pulls out, SP Group will continue to supply electricity. Would it honour remaining contracts at the same terms and prices until the end?
Judging by the trouble consumers faced over getting a refund of their security deposits from bike-sharing companies in Singapore and China, is it necessary for retailers to duplicate a security deposit as SP Group already holds a security deposit and households are a non-security risk?
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