With the launch of the Open Electricity Market (OEM), residential households can now choose to purchase electricity from one of thirteen electricity retailers. Those who want to continue purchasing from SP Group can also continue to do so.
In Singapore, electricity retailers purchase electricity from power generation companies and sell them to households. Prices charged to Singapore households are based on tariffs set by the Energy Market Authority (EMA). Revised every quarter, these tariffs are meant to protect consumers from high electricity prices.
Electricity is transmitted to households from power plants via Singapore’s national power grid. With the power grid remaining unchanged, electricity delivery to households would not be unaffected by the OEM.
Types of Contracts Available
Contracts offered by OEM retailers fall into two categories: Standard Price Plans and Non-Standard Price Plans:
Standard Price Plans
Standard Price Plans are offered by every retailer. There are two categories for these plans: Fixed Price Plans and Discount Off the Regulated Tariff Plans:
Fixed Price Plans
Fixed Price Plans charge consumers a fixed rate for electricity throughout the contract duration regardless of tariff fluctuations.
Discount Off the Regulated Tariff Plans
This plan offers a fixed discount off the prevailing tariff throughout the contract duration. Hence, prices will vary with the quarterly tariffs.
Non-Standard Price Plans
Non-Standard Price Plans are unique to different retailers. The most common type of Non-Standard Price Plan is the Peak and Off-Peak Plan, where retailers charge different prices for peak and off-peak hours. Do note that various retailers define peak hours differently.
Choosing the Best Electricity Plan for Your Home
Here are a few things to note when considering which electricity plan to sign up for:
Fixed Price Plans or Discount Off the Regulated Tariff Plans?
If the price of electricity is expected to rise, you get to save if you purchase a Fixed Price Plan. However, the price of electricity could also decrease below the fixed price rate during the duration of your contract.
Unlike the Fixed Price Plans, Discount Off the Regulated Tariff Plans guarantees savings through discounts on the prevailing tariff price. As such, Fixed Price Plans are recommended for consumers who are unsure about which plan to sign up for.
EMA has created a website to help consumers compare the different standard price plans offered by retailers.
Consider the Duration
Consider signing a contract with a longer duration. Many retailers are currently offering attractive deals to encourage customers to convert from SP Group. As more consumers enter the OEM, it is likely that retailers will increase their rates or decrease discounts. Thus, a 12 or 24-month contract may maximise your savings.
If you are uncomfortable signing up for a longer contract, you can always sign up for 3-month contracts offered by some retailers.
Understand the Terms and Conditions
Make sure you familiarise yourself with the terms and conditions before signing up for an electricity plan. There are several aspects you should note, such as the contract duration, payment terms, auto-renewal clauses, early termination charges, and security deposits.
Fact sheets and consumer advisories for the different plans can also be found on the websites of the respective retailers. It is best to read them carefully and clarify anything you are unsure of with the retailers before making a decision.
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