The Open Electricity Market (OEM) is progressively rolling out across Singapore, giving residents and businesses islandwide the ability to choose an electricity retailer at a rate that suits their household. For many, the Open Electricity Market with 13 new retailers will feel daunting, having only ever purchased electricity from SP Group.
It’s important to understand how the OEM works so you can take advantage of the OEM. Below you’ll find all the information you need to know, plus a four-step guide to help you choose.
Electricity Production and How Can Various Retailers Now Sell it?
Power generation companies in Singapore produces the nation’s electricity, of which 95% of was from processing imported natural gas. Every thirty minute, these companies bid for contracts to generate and sell a set amount of electricity to the wholesale market.
Other retailers, and SP Group, buy electricity in bulk from the wholesale market to supply to consumers who are under them. Until recently, SP Group was the only company buying electricity on behalf of households. Now, thirteen other players vie for a share of the market.
The OEM is part of the Energy Market Authority’s effort to free up the electricity market and give consumers a choice other than SP Group as their electricity provider. The market will push these retailers to compete, in the process providing better priced electricity for all.
Four-Step Buyers’ Guide
Step 1: Look at your Previous Electricity Bills
You would want to examine your own electricity usage so you can more easily choose the plan that’s right for you. This lets you get an idea of what your average monthly consumption and cost of your bill for the past few months.
Step 2: Estimate Probable Cost
The most recent tariff is24.39 cents/kWh, with GST. The highest tariff in the past two years was 25.82 cents/kWh, the lowest was 21.72 cents/kWh, and the average fell at 23.78 cents/kWh.
You can figure out the expected cost of your bill with these equations.
1. If you opt for a Fixed Price plan which allows you to pay for a fixed rate for a set duration:
Electricity Consumed (kWh) x Fixed Rate Cost (per kWh) = Expected Fixed Rate Bill
2. If you opt for a Discount-Off-the-Regulated-Tariff plan which applies discount on the prevailing tariff:
Electricity Consumed (kWh) x EMA-approved Tariff (per kWh) x Percentage = Expected Discount-Off-the-Regulated Tariff Bill
Based on the two equations above, compare different price plans offered by different retailers to see which suits your household most.
Step 3: Examining the Fact Sheet
When you have found a plan which you’re interested in, visit the retailer’s website to download the fact sheet for the plan. This will tell you the contractual terms such as duration, payment terms, security deposit, early cancellation charges, and auto-renewal clauses. It is important to understand the terms and conditions outlined by retailers, so you know what you are signing up for.
Step 4: Be Alert of Promotions and Discounts
The best thing about the OEM is that it is now a competitive marketplace, meaning that retailers are going to compete with special offers and prices to try and win you over. A discount or special-offer is something you should certainly take advantage of. Once you’ve followed these steps and found a retailer you like, all that’s left to do is sign up!
Don’t just stop here. Start keeping a lookout for different retailers and their electricity plans.
It is indeed evident that having multiple electricity retailers, which supplies power in a freer market environment, will benefit consumers like you in many ways.