With the opening up of the electricity market, you can now choose to purchase your electricity from a variety of electricity retailers, some of whom are offering attractive discounts.
So what does this mean for you? What benefits can you get out of it? Read on to find out.
The opening up of the electricity market means you can now buy electricity from a list of approved retailers, in addition to SP Group. There are several price plans that you can choose from to best suit your needs. Correspondingly, you would get a separate bill from these retailers.
If you’re happy with the way things are, you can remain with SP Group. You don’t need to switch to a retailer, nor is there a deadline to do so if you change your mind later on.
SO WHAT DOESN’T CHANGE?
With so many choices, what has remained is the same reliable supply of electricity that you’re getting every day.
SP Group continues to operate the island-wide network which delivers electricity to you, regardless of which company you buy electricity from.
In addition, SP Group continues to bill you for water and gas on behalf of PUB and City Gas and for refuse collection. It also provides meter reading and meter data management services for electricity. If you have switched to retailers like Best Electricity, Ohm or Tuas Power, you will still get the convenience of a single bill for water, gas and electricity.
RETAILERS ARE OFFERING CHEAPER PRICES. WHY CAN’T SP DO THE SAME?
The tariff rate offered through SP Group is regulated and approved by the Energy Market Authority. SP Group buys electricity at a regulated fixed rate and sells it to customers at zero mark up.
On the other hand, retailers buy electricity from the open market at market rates. Currently, supply exceeds demand, hence retailers are able to buy and sell electricity at a rate that is lower than the regulated tariff rate.
WHAT MAKES UP THE TARIFF RATE?
The tariff is made up of two key components:
- 75 per cent are energy costs paid to power generation companies.
- 25 per cent goes to SP Group for the delivery of the electricity to consumers. This SP component includes the cost of operating and maintaining the power grid network and the cost of metering and billing services.
IF I SWITCH TO A RETAILER, DO I STILL HAVE TO PAY THE SP COMPONENT?
Regardless of which company you buy electricity from, you will pay the same network operations price to SP. About 5.84 cents of the 24.22* cents of the tariff (July to September 2019) goes to SP. This SP component has been stable for the last 10 years.
SP Group has kept costs in check by using technology to ensure it operates as efficiently as possible.
SP also invests in building and renewing infrastructure to sustain reliable network performance. For example, SP Group built underground cable tunnels that house the high voltage electricity cables which also enable more efficient maintenance and replacement of existing and future cables. This helps reduce the need for road-digging works and ensures that the hardware works better over the long term.
*Before 7 per cent GST