Open Electricity Market: How to Choose the Cheapest Retailer for Your Business

Now that the Open Electricity Market (OEM) is available to you, are you not sure what to do and how to choose the best or cheapest plan for your business? We break it down for you.

Published:   |   Updated:   |   Posted in ,

This article covers the concerns that business owners may have with regards to the Open Electricity Market. If you’re looking for information for households, you can find out more here. The information presented below is correct as of 17th October 2018.

From 1st November 2018, Singapore households and small businesses can purchase electricity from retailers that are listed on the Open Electricity Market (OEM). The date of availability depends on which zone you are in.

NOTE: It is not mandatory for you to make a switch. You can continue to buy your electricity from Singapore Power (SP) at the regulated tariff.

Why open up the electricity market?

The Energy Market Authority wants to put the control back into the consumers’ hands, giving you more options and flexibility to choose what you need. The open market also encourages vendors to innovate and offer more competitive pricing, which will benefit the consumers.

Points of consideration for business owners

Do you use more than 2,000 kWh per month (which comes up to about $400) on average?

If you do, then even before the OEM initiative, you can already select your electricity provider.

If you don’t, then…

Do you own a small business with postal codes beginning with 60, 61, 62, 63 or 64?

If yes, you can already select your electricity provider.

If no, then…

Has the OEM been rolled out to your zone?

The rollout begins on 1st November 2018 by zones. 

Open Electricity Market rollout OEM Nationwide Map
The Open Electricity Market will be available to the whole Singapore by 1st May 2019 Image Credits: Open Electricity Market
Open Electricity Market rollout OEM Nationwide
The Open Electricity Market will be available to the whole Singapore by 1st May 2019 Image Credits: Open Electricity Market

If it has already rolled out to your zone, then…

Are you a landlord/Management Corporation Strata Title (MCST) or tenant?

Because it gets really technical, here’s a TL;DR version:

If you’re a landlord/MCST, check your master-sub metering arrangement and the scheme you’re subjected to. If you’re a tenant, check your contract with your landlord/MCST.

Here’s the full explanation:

If you’re a landlord or MCST with a master-sub metering arrangement, you can choose your retailers under one of the two available schemes: En-Bloc Contestability Scheme or Demand Aggregation Scheme.

En-Bloc Contestability Scheme: The landlord/MCST must obtain the consent of all the tenants to buy electricity on their behalf. If one of the tenants decides to opt out, all tenants and the landlord/MCST will return to buying electricity from SP at the regulated tariff.

Demand Aggregation Scheme: If the landlord/MCST is unable to obtain consent from all the tenants, they can aggregate the common services load and the load of all consenting tenants under a new sub-metered account. The non-consenting tenants are free to purchase electricity from SP at the regulated tariff or from electricity retailers if they are eligible to select their retailer.

You can check out more on Master-Sub Metering Agreement here.

If you’re a tenant, then you’ll have to check the contractual agreement you have with your landlord to see if you can opt out of any of the two schemes stated above.

Confused?

Use the eligibility checker to see if you qualify. Just enter your SP account number, postal code and captcha, and you’re good to go.

If you qualify, check with your landlord/MCST if you’re contractually bound to any of the schemes described above before making the switch.

Eligible? Submit an application

As a business owner, before you can switch to a retailer of your choice, you will have to apply to become contestable (i.e. eligible to select your vendor). Fill up the application form, then email or fax it to 6304 8633.

Alternatively, you can get your selected retailer to help! The 9-page form looks tedious to fill up anyway.

Choose a retailer

Now we get to the part where you get to choose. Comparing across retailers is simple. Head over to their price comparison tool and type in your average monthly power consumption, select your preferred price plan (fixed price and/or discount off the regulated tariff), and you get a list of retailers to choose from.

There are currently four retailers listed for business customers, namely

  1. Geneco
  2. PacificLight
  3. Sembcorp Power
  4. Senoko

Editor’s note: We are aware of the possible existence of a third price plan (i.e. the peak and off-peak plan). However, the option did not show up when we were selecting the plans. We will be contacting OEM to verify if this option is still available.

Which price plan should you choose?

The plan you choose depends on your outlook of the energy market.

Fixed price plan

The price is fixed for the entire duration of the contract, but as the regulated tariff fluctuates from quarter to quarter, you may be paying more or less than the regulated tariff.

Open Electricity Market OEM Fixed
For fixed price plans, the price you pay remains constant throughout the contract duration. Image Credits: Energy Market Authority

Choose the fixed price plan if you think that the electricity price is going to increase during your contract period or if you prefer certainty.

Discount off the regulated tariff

The price you pay is at a fixed discount off the regulated tariff for the entire duration of the contract. This means that you will be paying lesser than the regulated tariff, but it also means that your bill will fluctuate from quarter to quarter. While some of the discounts may look attractive, the potential downside is when the price exceeds even the highest fixed price available in the market.

 

Open Electricity Market OEM Discount Off Regulated Tariff
For discount-off-the-regulated-tariff plans, the price you pay fluctuates with the regulated tariff at a discount. Image Credits: Energy Market Authority

Choose the discount-off-the-regulated-tariff plan if you think that the electricity price is going to decrease during your contract period. These plans are priced at a fixed discount off the tariff and may be revised from quarter to quarter.

General observations

We ran a comparison using OEM’s price plan comparison tool, assuming an energy consumption of 800 kWh. We also got the latest regulated tariff from the Energy Market Authority’s website

  • The regulated tariff at the time of writing is 25.82 cents per kWh. The list of prices generated all have rates that are lower than the tariff.
  • The largest rate of discount off the regulated tariff is 22%.
  • Despite that, the cheapest plan is a fixed rate plan.
  • The difference between the cheapest plan and the most expensive plan is $24.21, and the premium has to do with the contract duration and the incentives.

The cheapest plan for a given contract duration and price plan is highlighted in the screenshot below.

open electricity market price plan comparison 800 kWh
The prices shown are based on an average monthly energy consumption of 800 kWh.

The difference in prices are generally based on these factors:

  • Length of contractual period
  • Discount off the regulated tariff
  • Incentives, such as absorption of various charges.
  • Promotions

NOTE: Cheap does not always mean good. Before you commit to a plan, look into the factsheet and the company’s existing promotions to see if you’re really getting the best deal.

Should you make the switch?

Presently, the fix rates are significantly lower than the regulated tariff (the most expensive fixed-rate plan is 17.9% cheaper than the regulated tariff), so it seems to make sense to make the switch. Even if you pick the plan that’s discounted off the regulated tariff, you’re already making savings as compared to staying on with the default electricity provider, Singapore Power, and be subjected to the regulated tariff.

Ultimately, it depends on your outlook of the electricity market. Nobody knows where the price of the regulated tariff will be heading next.

 

Featured image by Jonny Caspari on Unsplash

Like what you read? Follow us on Facebook and LinkedIn to get the latest updates.
I'd rather write how-to guides and stories than about myself, unless absolutely necessary. Also, ironically, I hardly write with a pen and paper.
>