SINGAPORE: The way you pay your electricity bills will soon be very much like topping up a pre-paid card.

This is possible under a S$3 million pilot scheme that allows small consumers such as households to switch between electricity retailers.

In fact, consumers will only pay for electricity as and when they need it.

Over the next 2 years, the market regulator will be piloting this new system, known as the Electricity Vending System (EVS), that aims at opening up competition in the market for households and small businesses.

Under the EVS, which has not been tried anywhere else in the world, small consumers are free to choose the various service packages offered by different retailers.

There is no monthly bill. Instead, consumers top up credits on a pre-paid card.

This is unlike the current scheme, in which consumers buy electricity from only one service provider - SP Services - where consumers get a bill each month and pay for how much they have used.

There are about 1.2 million small consumers in Singapore, most of them households. They account for a quarter of the total electricity demand here.

The rest are consumers which use at least 10,000 kilowatts each month. The market for these bigger consumers has been liberalised since 2003.

"Under the new vending system, there should be more choices for consumers - from whom they want to buy electricity, ... to how much energy they want to use a day," explained Khoo Chin Hean, chief executive of Singapore's Energy Market Authority (EMA).

"And if they prefer to stick to the current system of buying electricity from SP Services and paying a monthly bill, that's also an option too."

EMA added that the new system will also reduce the hassle and administrative costs of applying and paying for electricity.

EMA said initial trials will involve technical tests that include placing a Smart Meter outside the home, to track the amount of electricity used at different times of the day. The meter will also tell consumers how much credit they are left with.

EMA will test the Smart Meter on 200 households and small businesses starting next month.

Some consumers are already looking forward to the scheme, saying that it will give them more options. "Just like mobile phone, if they can give me a better price, then I will opt for the better provider," said a consumer.

"Actually it will be more useful for the household, because I think it will make the occupants more aware or more conscious of the use of electricity."

Meanwhile, other consumers are weary of the new system. "I think that it's even more hassle, more trouble," said another consumer. "I have to check how much I have left, in order not to be cut off from the electricity."

This raises another concern - what happens if credit runs out and consumers are caught unaware?

"We are also looking into various payment schemes to enable them to pay and to restore the electricity in a very short time," assured Khoo. "For example, we are also considering the possibility that one can use one's handphone to buy electricity."

EMA added that it will look into a system that will give consumers ample warning before credit runs out.

There are currently five electricity vendors in Singapore - Keppel Electricity, SembCorp Power, Tuas Power, Senoko Energy and PowerSeraya.

No details are immediately available on how these retailers will package their services, but the regulator said that it will ensure competition is not undermined.

"EMA does not regulate the packages that retailers put out, for a simple reason - this is something best left to retailers, and this also creates room for them to innovate," explained Khoo.

However, EMA will keep an eye on the retailers and see that there are no practices in the industry which undermines competition, Khoo added.

- CNA/yb