The Open Electricity Market is currently rolling out in phases to Singapore consumers and my home is part of the latest batch of eligible homes in January 2019. So now I can gamble on electricity as well 🤣
As with anything relatively new, I had a lot of questions and a general lack of answers online. Having burnt much of my video gaming time researching this topic, here are my findings and views about choosing a plan.
Disclaimer: While I strive to ensure all information below is accurate, I too am human and may mess up from time to time. For the most accurate information, approach the respective retailers directly.
For those who are only interested in price plan comparisons, here’s are the links:
- Standard Plans
- Non-standard Plans
To understand whether you should change retailers from SP Group, you should first understand the electricity market and why the Government is opening it up.
Essentially the electricity market has a couple of players:
- Power generation companies (GenCos) who own the power plants
- Power grid management company – SP Assets which owns and maintains the infrastructure to deliver electricity to your home
- Wholesale market operator – Energy Market Company (owned by EMA, basically the Government) who maintain the operation of the wholesale market GenCos sell their electricity in.
- Retailers – Retailers buy electricity from the wholesale market and sell it to the end consumer, a bit like a commodity trader. Previously, this was exclusively SP Services territory for the residential sector. With the liberalisation, private companies can now enter this space and sell electricity to residential consumers.
Why is the market being liberalised?
The main thinking behind this move is mainly to reduce electricity prices, which is advantageous to the consumer. The reason this is possible is that SP Services is regulated by the EMA and the prices they set, known as the regulated tariff, have to follow EMA regulations. These prices tend to be high as they are the default retailer for all Singaporean homes and businesses. They have to deliver electricity to all locations, even if the customer is potentially a bad debtor, or if the customer switches in and out of SP Services at a moment’s notice. The price set is higher to take into account the added risk.
A private retailer would not have these issues as they can be more picky with their customers. Also, as the prices they set are less regulated, they can be more creative in their pricing.
Other reasons include potential to shape the electricity demand and habits throughout the day (through peak and off-peak plans for eg) and to allow environmentally conscious residents to gain access to green energy.
2) Price Plans
There are currently 13 retailers offering price plans. Price plans can be split into 2 types – Standard and Non-standard plans.
Standard plans can be further split into 2 types – Fixed Price and Discount off Regulated Tariff (DOT) plans.
i) Fixed price plans
Fixed price means just that, you pay the contracted price per kWh throughout the entire contract period.
The key risk to fixed price plans is that the regulated tariff drops below your fixed price during your contract as illustrated above.
Prices highlighted in green are cheapest in category
*Inclusive of prompt payment discount
#Plans are actually for 18, 25 and 36 months
ii) DoT Plans
Discount off tariff means that you pay a fixed discount off the prevailing regulated tariff for the quarter.
Essentially your price will always be better than the SP services price as you pay a fixed discount off of the tariff price.
Prices highlighted in green are cheapest in category
*Inclusive of 5% prompt payment discount
#Starts at 20%, increases to 21% in the 4th month, increases to 22% in 8th month
Do also note that there are 2 creative DoT plans available:
1. Best Electricity Supply offers a cash rebate upfront DoT 24 month plan called Home Saver Upfront that pays you cash when you sign up. Cash rebate is calculated by the average electricity usage of the past 3 months prior to signing up times the percentage of cash rebate chosen. How much DoT you contract for is dependent on that choice per below:
This plan is best if you intend to reduce you electricity consumption going forward.
2. iSwitch also offers a free iPad (Silver 6th Gen Wifi 32GB) upfront but only a 5% DoT for the contract period for 36 months.
b) Non-standard plans
Non-standard plans bear features of fixed and DoT pricing but are more complex and creative than Standard plans. Not all retailers offer non-standard plans and generally new Advanced Metering Infrastructure (AMI) meters are required for these plans. If you live in the old estates, you may need to change your meters as part of switching to these plans.
I would broadly classify these plans into 1) Peak & Off-Peak plans, 2) Fixed consumption plans and 3) Floating rate plans.
i) Peak & Off-Peak plans
Peak & Off-Peak plans offer dynamic pricing depending on when the electricity is consumed, ie during the peak period it is one price, during the off peak period it is another price.
Here are the available price plans, in the format (Peak price / Off Peak price):
*Inclusive of 5% prompt payment discount
#Keppel & PacificLight Plans have a 7am-11pm peak period and SembCorp has a 7am-7pm peak period.
These plans are best for working couples who are generally not at home during the peak period.
ii) Fixed consumption plans
Fixed consumption plans refers to you buying a fixed amount of electricity monthly at a contracted rate, with consumption excess of the contracted amount charged at a different rate.
Only 2 retailers currently offer such plans:
These plans for best for households who have very consistent electricity usage.
iii) Floating rate plans
Floating rate plans have no fixed rate and fluctuates according to a benchmark or a price determined by the retailer. However, the upside is that there are no contract lock-in.
Currently only Ohm energy offers such plans:
- Simply Ohm – All inclusive floating rate + $10.70 per month. Currently at 17.39 cents/kWh. Prices/Monthly fee can change with 14 days notice. No contract lock-in.
- Market Ohm – Floating wholesale rate + $10.70 per month. Third party service fees are passed on to you. Monthly fee can change with 14 days notice. No contract lock-in.
These plans are best for households who believe rates will decline in the future and would like to have the flexibility to wait for rates to drop. Long story short – best for gamblers 🤣
Considerations when choosing a plan
Here are my views on what to consider when choosing a plan (in personal order of importance):
1) Electricity usage pattern
To best take advantage of the non-standard plans, it is best to understand your electricity usage pattern before switching. If you are working household with nobody at home during the day, a Peak & Off peak plan might be best for you. If you have extremely consistent kWh usage, a fixed consumption plan might be best for you.
Understand your electricity usage pattern before considering non-standard plans.
2) Expectation of future prices
Selecting a electricity plan is similar to shopping for a fixed or floating rate housing loan. If you expect the future regulated tariff to increase, you might want a plan with fixed prices. If you expect the future regulated tariff to decrease, you might want a DoT plan.
3) Retailer relation to a GenCo
If you are somebody who prefers stability and hates handling switching, it might be best to choose a retailer who is related to a GenCo. This is because the company is vertically integrated and more stable as a result. The retailer is less likely to collapse and force you to switch again midway through your contract.
A retailer who is purely a middleman between the wholesale market and the customer is more susceptible to price fluctuation and planning risk.
4) Customer Service Standards
With all the headaches that can potentially occur due to the infancy of the market, its best to be with a retailer with good customer service. Research reviews online to determine customer service standards.
5) Credit card promotions, rebates, freebies and referral programmes
A lot of the standard plans have similar pricing and profile from each other. As a result, the minor difference between each plan is simply the current promotions available to each retailer. Some have credit card promotions when you sign up to pay using a particular credit card. Some offer rebates on your electrical bill for a particular month. Some offer vouchers and free air-con servicing. Some have referral programmes where both referrer and referee get bill rebates.
Weigh all these promotions before ultimately taking the plunge.
6) AMI Meter requirements
If you are considering a non-standard plan and living in an old estate, you might need to change your electricity meter. Some retailers charge a fee for changing meters, some absorb the cost.
7) Billing preference
Most retailers require you to be billed separately from the SP Services bill. Currently, only Best Electricity and Ohm Energy offers an integrated bill with SP services.
8) Environmental Consciousness
If you are environmentally conscious, you may consider signing up for plans that use 100% solar energy like Sunseap-100 or are carbon neutral like ES Power’s plans.
My personal strategy
I currently stay in a home where there are people in the home most of the time. I personally expect future electricity prices to increase in the long run. I am somebody who hates handling admin work frequently. I would prefer to have a single SP services bill but it is not a deal breaker if my electricity is billed separately. While I am environmentally conscious, I am unwilling to pay too much of a difference in rates.
Based on this assessment, I will most likely go with the cheapest 2-3 year fixed price plan with a retailer who has a relation to a GenCo, which I believe is the option most Singaporeans will end up with.
My general recommendation for most Singaporeans who do not wish to “hack” their electricity consumption extensively is to consider the standard plans. If you feel electricity prices will go up or if you want stability, sign up for a fixed price plan. If you have no view on electricity prices and willing to take some volatility, sign up for a DoT plan.
Only if you’re adventurous or if the plan fits your lifestyle should you consider the non-standard plans.
Which electricity plans have you signed up for and why? Do let me know in the comments.
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