Anyone settling down in any given country should be well aware to ensure the basic essentials are settled first — water, electricity, security, food etc. For new permanent residents arriving on this island-state, this can be especially confusing.
While water, security and food are pretty straightforward, electricity — once under a single provider — now comes with more options on how you want to power up your home. Households can now switch providers of electricity, as part of the Government’s initiative to open up the retail electricity market.
To help keep electricity pricing down competitive, affordable and innovative, the Open Electricity Market was set up.
What Is The Open Electricity Market (OEM)?
Today, purchasing and subscribing to power is like buying mobile phone plans.
Instead of only being provided power by the then-sole provider, the SP Group, at a regulated tariff reviewed every quarter, the newly-minted OEM now provides a host of providers, deals and offers for households to choose from.
This process of liberalising the local electricity market had been a gradual process, kickstarted in 2001 and initially involved only heavy industries before it was opened up to more businesses that meet certain criteria.
Now, households can go shopping for electricity as well, and more than 30 per cent of them, as of September 2018, has opted to switch from SP Group to a power retailer of their choice, reducing their electricity bills by about 20 per cent.
The switch is not compulsory but merely an option. Households that have not made any such move will still be covered by SP Group by default.
The liberalisation is being done gradually, as with most government policies, according to postal codes in four batches, namely households with postal codes 58 – 78 being the first, 53 – 57, 79 – 80 and 82 – 83 second, 34 – 52 and 81 being the third and finally 01 – 33 being the last. As at the time of this article’s publishing (March 2019), the first 3 batches of postal code ranges have already come into effect while the fourth batch will be live on 1 May 2019.
As for the number of retailers available to choose from, the Energy Market Authority’s latest update shows 13 brands competing in the local power scene. However, the list does not seem to be permanently fixed, since there have been potential providers looking to join in, and some that have previously pulled out are thinking of rejoining.
With so many retailers vying for what is a relatively small market, and each has a host of packages, offers and perks, choosing the right plan for your home can be a confusing and tedious task.
To assist in the decision process for consumers like you, EMA simplified the standard plans to just two types: a fixed price plan and a discount-off-the-regulated-tariff plan.
The first plan is characterised as having one fixed rate for electricity over the duration of the contract which can be as short as 6 months or as long as 2 years. Electricity sold to retailers (who then devise a plan to sell to you) is based on quarterly-reviewed tariffs. Having a fixed plan will ignore all tariff fluctuations that occur throughout your contract duration, i.e. you may enjoy some savings in your next bill if the tariffs go up. For instance, plan prices observed so far are about 18 cents/kWh for a 12-month plan and 16-17 cents/kWh for 24 months; Q4 2018’s tariff stood at 24.13 cents/kWh.
For the second plan type, it is characterised as retailing power at a fixed discount off the current tariff over your contract period. As of now, retailers are offering such discounts at about 21 per cent.
In addition, retailers also offer various other plans such as the peak and off-peak plans where consumers pay more during the peak periods but pay less during non-peak periods and clean energy options for friends of the planet.
There are lots of other promotions and perks shelled out too, so keep a look out for those.
Let’s Say You’re Interested
Contact your retailer of choice for more information and request a fact sheet and a consumer advisory. These should contain key information that you should be informed of before making the move.
Before you agree and sign on any contracts, be meticulous and scrutinise all the terms, i.e. duration of the contract, security deposits, payment terms, penalties for premature termination charges and auto-renewal clauses. Also, ask for any terms and conditions related to bundled products or services.
Take note, also, of the billing arrangements by retailers. There are retailers that bill their customers through the SP Group so that customers can receive electricity and non-electricity charges within a single bill.
Always take time to fully understand what your options are before making the decision. When you have decided to make the switch, your chosen retailer will make the change for you with SP Group and have your contract started as soon as within five business days.
What If You Change Your Mind?
You can always revert to the SP Group or take on another electricity provider as your preferred one, but be sure you are already aware of and check on any premature cancellation charges or any associated fees before doing so, and that you are ok with it.
No matter what your choice is, you can be assured that your power supply will not be affected since SP Group remains as the national power grid operator, even in the event your provider fails to provide a satisfactory service, in the business sense of the word.