Consumers may switch electricity retailers as open market rolls out in phases from Nov 2018 to May 2019

SINGAPORE — Starting from Nov 1, consumers will be able to choose their electricity supplier when the open electricity market is expanded to cater to them zone by zone around the island.

By May next year, when the full roll-out is completed, 1.4 million households and small businesses will have the option of buying electricity from 12 different providers.

Instead of being restricted to buying electricity from national utility provider SP Group at a regulated tariff as they do now, consumers may choose a price plan that meets their needs from the authorised retailers within the open market.

The Energy Market Authority (EMA) announced the staggered roll-out on Friday (Sept 21), after five months of piloting the project in Jurong.

From November, the first zone to have access to the open market are areas with postal codes starting from 58 to 78.

The next will be from Jan 1 next year, for postal codes starting with 53 to 57, 79 to 80, and 82 to 83.

After that, from March 1, it will be postal codes starting with 81 and 34 to 52.

Finally, from May 1, postal codes starting with 01 to 33.
 

TIME FOR PUBLIC OUTREACH

Ms Dorcas Tan, EMA's director of market development and surveillance, said that the decision to do the roll-out in phases is to allow the authority and the retailers to focus resources on engaging and educating the public in each zone.

Before each zonal roll-out, consumers will receive a notification package, which consists of an information booklet and a list of frequently asked questions.

Those who want to remain with SP Group need not take any further action. There is no deadline for switching to a new provider.

Households and workplaces will receive the same electricity supply regardless of the retailer because SP Group will continue to operate the national power grid and deliver electricity islandwide.

At a media briefing on Friday, EMA's chief executive officer Ngiam Shih Chun said that the soft launch in Jurong was "very successful".

About 30 per cent of households there have switched their electricity retailers. Those who did are paying a rate that is about 20 per cent lower than the regulated tariff.

The fixed price plan, as well as those that offer a discount off the regulated tariffs, were the most popular among Jurong households and small businesses.

The peak and off-peak price plans, however, saw a low public take-up of less than 1 per cent among Jurong consumers during the pilot launch, so Mr Ngiam said that they will be removed from the standard suite of price plans in the nationwide roll-out.
 

SAVINGS ON BILLS

Mr Chew Jin Ming, 30, who lives in Boon Lay, expects to see cost savings of about 25 per cent on his monthly electricity bill after switching to a fixed price plan offered by Geneco in mid-August.

Another Jurong resident, Mr Luqman Haniff told TODAY that he used to pay about S$220 a month in electricity bills. After switching to a fixed price plan offered by Ohm Energy on April 1, the 30-year-old's monthly bill comes to about S$180. This means there is an 18 per cent reduction in his bills.

With electricity tariffs rising 6.9 per cent in the quarter from July to September, Mr Luqman said that his cost savings is even higher, considering that he would be paying about S$240 a month if he had not switch supplier.

While the aim of liberalising the electricity market is to give consumers choices through competitive pricing and innovative offerings, Mr Ngiam reiterated that consumers are not required to switch providers.
 

RETAILERS' RESPONSIBILITIES

As part of measures to safeguard consumers' interests, EMA requires retailers to protect all security deposits collected from households. Retailers also need to produce a consumer advisory and factsheet to consumers.

Speaking to reporters after the briefing, Trade and Industry Minister Chan Chun Sing said that the positive feedback during Jurong's pilot phase gave the authorities the "confidence" to roll out the initiative to the rest of the country.

One of the lessons learned, he noted, was the diversity of consumers in the retail market, ranging from older citizens who may not be able to converse well in English, to younger families who have a higher level of understanding.

A "more detailed" explanation to consumers is required, he added.

Four retailers who took part in the soft launch — Diamond Electric, Red Dot Power, Sun Electric, Sunseap — will not be part of the nationwide launch. They are re-assessing their business plans or developing certain products or systems for the time being.

For the 500 or so consumers who had signed up with these four retailers, there will not be any disruption to their electricity supply as their contracts will still be honoured.

However, since they cannot renew their contracts when the term is up, they may either switch back to SP Group or get another retailer.

This also applies to consumers who have signed up with other retailers who may decide to exit from open electricity market in the future.

Responding to TODAY's queries, Sunseap, Sun Electric and Red Dot Power are still looking to rejoin the open market some time in the future.

Red Dot Power and Sun Electric said that they are developing and upgrading their digital portal to allow greater convenience for consumers to sign up, while Sunseap is in the midst of enhancing its systems and suite of products.

All three electricity retailers assured their existing customers that they would not face any disruption to their electricity supply.
 

LIST OF PARTICIPATING RETAILERS

• Best Electricity Supply

• Environmental Solutions (Asia)

• Geneco (by Seraya)

• I Switch

• Keppel Electric

• Ohm Energy

• PacificLight Energy

• Sembcorp Power

• Senoko Energy

• SingNet

• Tuas Power

• Union Power
   

BACKGROUND

Since 2001, the EMA has been progressively opening up the electricity market to promote greater competition, giving consumers the choice and flexibility to buy electricity from retailers.

About 108,000 households and 9,500 business accounts in Jurong had the option of buying electricity from 13 retailers under a soft launch of the open market which kicked off on April 1 this year.

The final phase of market liberalisation will start Nov 1.

Hyflux Energy was one of the retailers taking part in the pilot, before announcing in June that it was pulling out until further notice due to competition.