SINGAPORE: Electricity retailer Union Power announced on Monday (Oct 18) that it will cease 850 accounts as it reorganises its business amid "sustained hikes" in wholesale energy prices.
The company emphasised, however, that it is not exiting the electricity retail market in Singapore.
Union Power said it will drop some retail electricity accounts while continuing business-as-usual with most residential customers, the majority of its clientele. It will have about 20,000 accounts after the reorganisation.
"Customers affected by the reorganisation can appoint a new retailer or have their accounts transferred to SP Power," said Union Power in a media release.
"Union Power will make the necessary arrangements to ensure minimal disruption of electricity supply."
The announcement comes after two other retailers, iSwitch and Ohm Energy, said last week that they were exiting the Singapore market.
"The recent volatility in the global energy market has impacted the national electricity market of Singapore very significantly as local power generation relies largely on natural gas," said Union Power, which is part of the Union Energy Group.
Due to the sustained price surges, the company said it had to segregate customers according to usage levels.
"Base load customers usually use a minimum and continuous amount of electricity on a typical 24-hour period with little change to their requirements. By contrast, peak load is less predictable and hence, more expensive," it explained.
"Union Power is ceasing mostly peak usage accounts such as commercial customers, some of whom are in arrears. Where applicable and not in arrears, these customers will receive payment from Union Power," it added.
"Most non-peak accounts such as residential households will not be affected."
Union Power executive director Ellen Teo said the price volatility has placed "immense pressure" on all independent retailers.
"Union Power has embarked on reorganisation with sadness as it values customer loyalty and relationships. This is a difficult but necessary step to ensure the financial viability of Union Power," she added.
The Energy Market Authority (EMA) has said it is working closely with electricity retailers facing challenges given the “exceptional” circumstances in the energy market, where those who have under-hedged their positions may be exposed to price volatility.