What to Know About the Open Electricity Market in Singapore

Back in April 2018, the Open Electricity Market (OEM) was introduced to Singapore through several phases across the island. Sadly, the public response to this has been rather lukewarm.

Although the Energy Market Authority (EMA) has put out initiatives to educate the public on the OEM, many households have yet to switch electricity retailers.

Perhaps you’re one of those who feel reluctant or unsure about departing from SP Group. This article seeks to provide you answers to the questions you’ll likely have regarding OEM (don’t forget to share this with your parents, they probably share the same concerns as you too.)

Are New Retailers Trustworthy? How Do They Manage to Offer Such Low Prices?

Currently, there are plenty of good price plans being offered by retailers. The most common two would be the Discount Off Regulated Tariff plan, offering as much as 25% off, as well as the Fixed Price plan, which charges a constant rate regardless of tariff fluctuations. You can learn more about sp services tariff here.

Of course, Singaporeans have been skeptical about how retailers have managed to offer such cheap prices, which explains why many have yet to make a switch for business electricity suppliers.

Let’s first look at how the SP Group sets the cost of their electricity.

In case you’re unaware, SP Group does not decide on the prices charged to their customers. In fact, SP Group has to comply with charging the regulated tariffs set by EMA. Naturally, these tariffs are inclusive of additional charges, in order to cover the operational costs of SP Group.

OEM retailers, however, have freer rein to set competitive prices – some willing to charge really low in order to gain a foothold in market share, and benefit from the economies of scale later on.

As retailers compete with each other, customers like you will stand to benefit the most as many competitive prices and promotions are still on offer.

What if a New Retailer Shuts Down?

In January 2019, retailer Red Dot Power announced that they were leaving the industry, causing many to be worried that other retailers would do the same during a period of market consolidation.

However, this concern has been addressed in Parliament – Singaporeans are assured that if a retailer shuts down, customers would either switch to another retailer who would comply with their existing contracts or revert back to SP Group and pay the usual tariffs charged.

In case you’re also worried about what would happen to the power supply, fret not. If a retailer decides to leave the OEM, all households will still have access to their electricity supply – no sudden blackouts whatsoever.

Is the Electricity Supply From The New Retailers Reliable?

Over the years, SP Group has built up a sturdy reputation amongst Singaporeans for being our sole, steady supplier of electricity. Another concern Singaporeans have is that purchasing electricity from a different supplier might be risky and that there might be unexpected interruptions to their power supply.

If that is you, you can rest assured that SP Group is in charge of maintaining the country’s power grid, as well as the substations that supply power to our respective households. Disruptions to the power supply have nothing to do with the retailer you’ve decided to purchase electricity from.

What are Some Valid Reasons to Stick With SP Group?

While there are benefits of switching to a new OEM retailer – the most important being cost savings – there are a few good reasons to remain with SP Group.

If you intend to move house, it might be best to stick with SP Group as you might need to switch accounts or pay early termination charges. Some electricity retailers do offer to omit admin and early termination fees if you’re moving, so be sure to contact customer service or browse their FAQ for more clarifications on this.

For those who struggle to pay their electricity bill on time, you might feel more comfortable sticking with SP Group. As a government-backed entity, they tend to be more forgiving towards late payments – extending their payment terms, and deferring the cut to your house’s power supply.

Finally, the prospect of getting bills from an additional company might seem too bothersome for some of us. Although this is valid, are you really willing to pay an additional 25% in fees, just for the sake of having fewer bills to sift through? Furthermore, some retailers have joint hands with SP Group, allowing customers to continue receiving a single bill that consolidates all their utility expenses.

Are there any Promotions Offered By The OEM Retailers?

Because there is now competition in the electricity market, retailers need to differentiate themselves from their competitors. Since the launch of the OEM, many retailers have been offering limited-time promotions and insurance deals in attempts to secure customers. Consumers should take advantage of this, and choose the retailer that will help you secure the most savings. Before deciding on switching retailers, be sure to shop around and look for those offering the best discounts and price plans. Don’t be fooled by enticing but short-term discounts. Choose plans that will help you save the most money in the long term. The EMA has also put up an infographic on their site, listing the steps you should take in switching retailers.

There are currently 12 retailers in the Open Electricity Market. It might be a long list to choose from, but the variety gives you the flexibility to really choose a retailer with a plan that satisfies your needs and preferences.

Hopefully, this article has clarified some of your doubts regarding the OEM. If a retailer closes down, remember that you don’t have to worry about having the power cut off, or being forced into a contract you’re unfamiliar with. Also, you can rest assured the source of your electricity remains taken care of by the same power generation companies, regardless of which retailer you’re buying from.

With plenty of resources online to help you select a retailer, switching retailers shouldn’t be too much of a hassle. More importantly, look forward to the savings you’ll enjoy in the long-term!