Published on: 24/09/2018
Let’s face it: we are no Nick Young from Crazy Rich Asians, and just like you, we felt the pinch when the electricity tariff increased from $0.2365/kWh to $0.2413/kWh for the period of 1 October to 31 December 2018. Current tariff (1 January to 31 March 2019) is set at $0.2552/kWh. This took its toll on crazy average Singaporeans like you and me.
Don’t worry though, it’s not the end of the world! Did you know that starting from 1 November 2018, you no longer need to buy your electricity at just the regulated SP tariff? The Open Electricity Market (OEM) has been progressively launched, based on geographical locations. That means you can choose to purchase your electricity from 13 participating electricity retailers, with each offering different plans. If you have not heard of OEM, we’re here to make sure you don’t miss out.
What is OEM and what it means for me?
OEM is an initiative by the Energy Market Authority (EMA) to enable homeowners and business consumers to purchase electricity from a Retailer with a price plan that best meets their needs. Since 2001, EMA has progressively deregulated the retail electricity market to bring about competitive pricing, enhanced services and innovative offers from Retailers. But this was only available for business consumers with an average monthly consumption of at least 2,000 kWh up until 1 April 2018, following the soft launch of OEM in Jurong.
Why should I switch to a retailer?
Now that you know what OEM is, you must be wondering: why should I switch? Well, for starters, it’s A LOT cheaper.
Here’s how much:
Okay, we get that it’s not always about price for some. So, here’s a full list of other benefits of switching to a retailer.
1. Save up to 30% on your electricity bills
As described in the scenario above, most plans offered by retailers are generally cheaper compared to SP’s regulated tariff. Furthermore, with so many retailers in the market, consumers stand to benefit even more from some healthy competition, as it drives them to offer attractive price plans and discounts to boost sign-up rates.
2. Win attractive promotions and freebies upon signup
Retailers often strive to outshine their opponents beyond just prices, by bundling in freebies and other value-added services. Now is the best time to take advantage of this and grab those vouchers/freebies!
3. Choose from more energy options
You now have the liberty to choose how you want to power your home, either with natural gas, as per current arrangement, or with solar power. For those who want to play your part in promoting sustainable living, you can do so by purchasing clean energy from certified retailers.
4. Gain freedom of choice and power of voice
Exercise your rights as a consumer, decide how you buy your electricity. With freedom of choice, comes power of voice. Switching to a retailer also allows you to interact and share your feedback. Subsequently, it will prompt retailers to improve their plans and services, to entice new and existing consumers to sign-up or re-contract.
5. Maximise savings through awareness on electricity consumption
The introduction of OEM has made us more conscious about how we consume electricity. From buying electricity at the regulated tariff from one supplier, we can now choose from different types of plans such as the fixed rate and discount off tariff plans. To maximise savings, ultimately, it’s all about understanding your usage patterns and finding a plan that best meets that need. This eventually leads to more considerate consumption, which saves cost and—hopefully—natural resources in the long run.
What should I consider before switching?
Decided to switch providers? Now we’re talking! Read on to know what to consider before committing to a contract.
1. Your Priorities
What are you most concerned about?
(a) Commitment: How long are you willing to commit to a contract? The shortest contract duration starts from 6 months. If you’re sitting on the fence, unsure if a plan works for you, don’t be bound by a long-term contract. Shorter-term could be the one for you.
(b) Price: Contrarily, you can lock in on a 1-2 years plan for maximum cost savings, if cost is your top priority, and you’re certain that the selected plan is what’s best for you.
(c) Value: If you’re more about getting the bang for your buck rather than just cheap prices, you should look out for retailers that bundle in value-added services and incentives such as loyalty benefits, referral rewards, etc.
(d) Brand: Most people look out for the best deals but for others, buying from a brand they’re most familiar with is what matters most, as it gives them peace of mind, regardless of how much they’re paying. If you’re one of those people, buying from a reputable retailer would be a top priority for you.
2. Your Usage Pattern
Having a clear understanding of your consumption level is, essentially, the first step to determining which plan is most suitable for you (more on this later).
3. Smart Meter
You can choose to keep your existing meter, which is read every other month, or install an AMI Smart Meter that allows accurate half-hourly reads. Do note that there will be a one-time installation fee of $42.80 charged to your next electricity bill if you choose the AMI Smart Meter.
4. Your Current Contract
(a) Contract expiry: When does your current contract expire? This will determine the commencement date of your new contract.
(b) Termination clauses: What are the termination clauses, should you be dissatisfied with the services provided? Read through and familiarize yourself with the terms and conditions to avoid potential conflicts.
What plan suits me best?
Here comes the fun part: comparing and reviewing plans.
1. Fixed Tariff
How it works: Provides a locked-in rate per kilowatt-hour during the contract period, usually one year or more.
What this means: You won’t need to monitor SP’s quarterly fluctuating rates.
This is for you, if: You want a little more certainty and prefer a constant electricity rate throughout the contract duration. However, electricity rates may be higher or lower than the regulated tariff, as the regulated tariff is reviewed every quarter.
2. Discount Off Tariff
How it works: Provides a fixed percentage discount off the tariff set by SP, but the electricity rates may change each quarter as the tariff gets reviewed.
What this means: Whatever the SP tariff may be, you will get a fixed percentage discount off, and enjoy the best deals throughout the contract period.
This is for you, if: You are not a fan of fixed rates and do not want to end up overpaying when the tariff decreases.
3. Peak & Off-peak*
How it works: Under this scheme, you are charged different rates for electricity usage depending on the time of day. For instance, $0.1880/kWh for the peak period (from 7am – 11pm); and $0.1538 for the off-peak period (from 11pm – 7am).
What this means: You achieve greater savings if your consumption is skewed towards the off-peak timing.
This is for you, if: You enjoy strategic planning and use more electricity during off-peak hours. For example, you’re a working young couple with no kids. You only use most electricity-hungry appliances such as air-conditioner, washing machine, and dryer during the off-peak period.
* Peak and off-peak plans were initially offered to Jurong residents during the soft launch. It has since been withdrawn when the OEM rolls out nationwide, due to the lack of interest from consumers. Retailers could still offer this plan, but it will be classified as a non-standard plan.
If you’re looking out for the cheapest plans, here’s a quick comparison table:
* Rates as of 1 March 2019. All prices are accurate at the time of writing and might be subject to change.
Are there any additional charges I should look out for?
Rest assured, there will be no third-party charges passed on to you for any residential electricity plan. However, some retailers do charge an admin fee to manage your account; this will be made clear to you in the contract.
If you’re also looking out for electricity plans for your company, these are the charges that may be passed on to you, depending on the retailer and type of plan you choose:
1. Transmission Loss Factor
Transmission Loss Factors (TLF) are scaling factors applied at the metering point to account for network and transformer losses. These factors are derived using the methodology approved by EMA. Your monthly bill should include both the meter readings and TLF, currently at 1.034930 effective since 1 April 2018.
If your meter reading is 350 kWh, your retailer will bill you for 362 kWh instead (350 kWh x 1.034930 = 362.23 kWh). It is up to the retailer to absorb the cost or to charge it to your bill accordingly, depending on the type of plan you are offered.
2. Carbon Tax
A carbon tax is a tax levied on the carbon content of fuels. Earlier this year, Finance Minister Heng Swee Keat announced that all facilities producing 25,000 tonnes or more of greenhouse gas emissions annually will be made to pay a carbon tax of $5 per tonne starting from 2020. The rate, however, differs from Retailer to Retailer and may pass through different charges to the consumers. It will also be reviewed in 2023, and will potentially increase to anywhere between $10 and $15 per tonne.
3. Market Development and System Charge (MDSC)
The Market Development and System Charge (MDSC) is a scheme that supports market development initiatives to enable commercial and residential electricity consumers to enjoy more competitive prices, increased retail options, and greater price transparency. The MDSC charge has been revised to $0.03984/kWh with effect from 1 April 2018.
4. Retail Service Charge
Retail Service Charge is an administration fee that may be charged by retailers to manage your account.
What to do next to switch?
At this point, we’d bet you can’t wait to say ‘sayonara!’ to expensive electricity bills. Watt next? (Sorry, couldn’t resist the pun there.)
First things first, prepare all the following documents beforehand, so that you won’t have to abandon the process just to search high and low for them.
1. Recent SP power bill
2. Your NRIC, if you’re the one signing up for the contract
3. SP account holder NRIC, if you’re not the current account holder
4. Debit/credit card (just in case), as some retailers charge a deposit
Then, simply follow these steps to complete the switch:
1. Visit ELECTRIFY.SG to start comparing.
2. Tell us who you are and your electricity usage profile to find the best plans. Once you’re done, just click Submit.
3. We’ll scout for the best deals. All you have to do is compare and select.
4. Ready to switch? Create an account and send us the necessary details for processing.
5. Complete your contract by uploading the necessary documents, and submit a payment online. Your new electricity supplier will now process the switch.
6. Reward yourself. With the money you’re about to save, it’s time to finally put it to good use and do something you love! Like travelling, or simply pampering yourself to a well-deserved facial and spa. Whatever it is, make sure you come back more radiant than ever.
Concerned about the switch? Don’t worry, we’re here to address them.
1. Will there be any electricity disruption when I switch providers?
No. Electricity is delivered to you through the national power grid. Retailers buy electricity in bulk from the wholesale electricity market to supply to you. That means changes are purely administrative, and you will continue to enjoy the same quality of electricity supply.
2. Does my contract start immediately after I confirm the switch?
No. Usually, the entire process takes about 2 weeks, during which your new supplier will contact your old supplier and agree on a switchover date.
3. Will I be billed twice?
No. Your suppliers will settle with each other accordingly, making the process as seamless for you as possible.
4. Can I switch suppliers once my contract starts, if I’m not happy with the plan I’ve selected?
We do not recommend switching before your contract expires, but if you absolutely have to, check the termination clauses with your retailer. Usually, there will be some penalty charges you’re required to pay in order to terminate the contract.
While the process of switching has been made seamless by most Retailers, the comparison process isn’t as straightforward. Understanding your usage pattern is one thing, browsing through a long list and finding the right plan that meets all your needs is another. That’s the gap Electrify is striving to bridge. We are Singapore’s first retail electricity marketplace to help household and business consumers compare electricity plans with ease. Visit ELECTRIFY.SG to find out how you can maximise your savings.