What You Need To Know About The Open Electricity Market Before Making The Switch

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In April 2018, the Energy Market Authority (EMA) piloted the Open Electricity Market (OEM) for business accounts and households in Jurong. The OEM began as an effort to introduce competitive pricing and innovation for the benefit of consumers by liberalising the retail power market. Consumers can now have the retailer and price plan of your choice, much like buying your mobile phone or broadband plans. Following the pilot test, the OEM will be made available to consumers across Singapore from November 2018. The rollout is made in stages according to zones:

Postal codes beginning from Launch date
Zone 1             58 to 78 1 November 2018
Zone 2             53 – 57, 79 – 80, 82 – 83 1 January 2019
Zone 3             34 – 52, 81 1 March 2019
Zone 4             01 – 33 1 May 2019

The freedom to choose is important as it allows you to find an electricity plan that caters to your needs. To date, there are 13 retailers. Consumers can choose between a Fixed Price Plan, where you pay a fixed rate during the contract period, or a Discount Off the Regulated Tariff Plan. The latter means that the rate you pay is pegged to the regulated tariffs, which changes every three months. Whether the tariff increases or decreases, you will receive a fixed discount off it. Some retailers offer 14 per cent off while others might go as high as 25 per cent during the contract period.

Why are there electricity retailers? In Singapore, electricity is produced by various power plants. Every 30 minutes, power generators bid for contracts to produce and sell indicated quantities of power on the wholesale electricity market, from which retailers will buy bulk to provide for their customers. Because the electricity is then distributed across Singapore on the SP Group-operated national power grid, consumers do not have to worry about reliability and service interruptions.

With the sudden increase in options, all of this can sound confusing and overwhelming. Here are some commonly asked questions about the OEM:

Is switching compulsory?
Switching is not compulsory. Your electricity will continue to be provided by SP Group if you choose not to switch. There is also no deadline for the switchover, so you can take the time to understand and compare the various price plans.

 What happens after my contract ends?
The plans come with durations of 6-, 12- or 24-month contracts. The retailer will inform you at least 10 business days before expiration. You can either re-contract with your retailer, switch to a new retailer or switch back to SP Group.

What are the benefits of making the switch?
The main benefit is the savings you’ll gain on your electricity bills. With the opening up of the electricity market, retailers are also bound to throw in perks and freebies. That said, be sure to understand the terms and conditions before signing up.

How much can I save from making the switch?
Following the soft launch in Jurong, EMA has indicated that consumers who switched saw an average drop of 20 per cent in their bills compared to the regulated tariff. Consumers can have savings of up to 30 per cent.

Am I eligible?
The OEM is available nationwide but will be offered in phases according to four geographical zones.

Is a Fixed Price Plan or Discount Off the Regulated Tariff Plan better for me?
It depends. Fixed Price Plans offer you the surety of the same rate every month, while you will be subject to the fluctuations of the rates with the Discount Off the Regulated Tariff Plan. With the Fixed Price Plans, the rate could be higher or lower than the regulated tariff from quarter to quarter.

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