Open Electricity Market: A new world of choices

Open Electricity Market: A new world of choices

From meal delivery to mobile phone plans, we are used to having plenty of choices. The power of choice has now been extended to something that we also use in our everyday lives – electricity.

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Researching your options before switching electricity retailers could help you and your family save money in the long run. Photos, graphics: Shutterstock, Energy Market Authority

Announced by the Energy Market Authority (EMA) last year, the Open Electricity Market has been extended progressively by zones since November to consumers across Singapore. Over 1.4 million households and business accounts will eventually have the option of buying electricity from a retailer other than the SP Group, at a price plan that best meets their needs.

The end result? More choices and innovative offers for you, without affecting your electricity supply. This is because SP Group will continue to operate the national power grid and deliver electricity to your home or office.

Here’s what you need to know before shopping for a new electricity retailer.

DOING YOUR HOMEWORK

To learn about your choices, visit openelectricitymarket.sg. You can check out the list of participating retailers that you can buy electricity from and find out the essential information that will help you in choosing a retailer and price plan.

Next, use the Energy Market Authority’s (EMA) Price Comparison Tool to compare the retailers’ standard price plans. The electricity rates shown here are all-inclusive, which means you pay the rate as stated by the retailer. You can sign up for six-, 12- or 24-month contracts.

Consumers can choose between two standard price plans offered by retailers: The Fixed Price Plan and Discount Off the Regulated Tariff Plan.

Under the Fixed Price Plan, you pay a constant rate, such as 20 cents/kWh, for electricity throughout your contract duration. This rate may be higher or lower than the regulated tariff during the contract, as the tariff is reviewed quarterly. If you prefer the certainty of paying a fixed rate instead of a rate that changes quarterly, this could be the plan for you.

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For illustration purposes only. Source: Open Electricity Market website
 

The Discount Off the Regulated Tariff Plan, on the other hand, offers a fixed discount (e.g. 20 per cent) off the prevailing regulated tariff throughout your contract duration. This is ideal for those who want a rate that is always lower than the regulated tariff, but do not mind the rate changing every quarter.

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For illustration purposes only. Source: Open Electricity Market website

Retailers may also offer incentives as well as bundled services and products as part of their standard price plans.

They could also offer non-standard price plans, like peak and off-peak price plans. (Tip: Price plans not found on EMA’s Price Comparison Tool are likely to be non-standard price plans.)

As you are shopping for a retailer, the following may also be factors that you may want to consider before selecting one.

BILLING: WHAT CHANGES?

In the Open Electricity Market, you can be billed directly by the retailer or through SP Group. This depends on the retailer you have signed up with.

If you are being billed directly by your retailer, you will receive two sets of utilities bills monthly:

  • One from the retailer for electricity charges
  • One from SP Group for non-electricity charges – water, town gas and refuse collection

In this case, you will need to set up new GIRO or credit card arrangements to pay for your electricity bill. If you are billed through SP Group, you will continue to receive one bill for both electricity and non-electricity charges, and your existing billing arrangement will carry on as usual.

SECURITY DEPOSIT: DO I NEED TO PAY FOR IT?

Some retailers collect a security deposit from you while others do not. If your retailer collects a deposit, they  will have to return it to you when your contract ends or if the retailer happens to cease operations.

And what happens to your existing security deposit with SP Group? Sixty-five per cent of the security deposit will first be used to offset any outstanding charges with them.

The remainder will then be used to offset your future non-electricity charges. Alternatively, you can request a refund of the security deposit allocated to your electricity charges from SP Group.

MAKING THE SWITCH

You have decided to switch to a retailer. What’s next? Contact your preferred retailer for the price plan details. Take note of the key contractual terms in the price plan’s Fact Sheet, including:

  • Contract duration
  • Payment terms
  • Security deposit
  • Early termination charges
  • Auto-renewal clauses

Be sure to read the Consumer Advisory for residential consumers before signing up.

If you sign up with a retailer, it will work directly with SP Group to make the transition to your new plan. Your contract can start as early as five business days after your retailer informs SP Group that you plan to switch.

For more information on the Open Electricity Market, visit openelectricitymarket.sg or call 1800 233 8000.

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