Top Q & A About OEM: Open Electricity Market Singapore

Following my article on 'How much can you really save?', many people have many questions about this OEM or Open Electricity Market.  Today I shall answer all of them, if you still have questions, please WhatsApp me Andy at 93672286. 

1. What is this OEM Open Electricity Market?

The OEM is an initiative by the Energy Market Authority (EMA) to enable households and businesses to buy electricity from a retailer with a price plan that best meets their needs. The launch of the OEM will provide consumers with more choices and flexibility in their electricity purchases.

It simply means that the electricity market is now opened to allow more players, and customers to have choices.  This also means that previously the market is not open and is closed to one monopoly single supplier: Singapore Power (and its predecessor PUB)

2. Why the Singapore government suddenly opens this electricity market?

The Singapore government did not suddenly open this electricity market. The market was first opened 20 years ago in the year 2001 when Keppel Electric Pte Ltd (part of blue-chip listed conglomerate Keppel Corporation Limited) was awarded the first electricity retailer license.  Most people did not know about this because the market then was only opened to industries, meaning for residents and the day-to-day men and women, the market for electricity was not opened.

In reality, the USA, Europe, Japan, Australia and many other countries all have opened their electricity markets decades ago. So Singapore is not the first country in the world to open this market. 

3. Does this Mean that From Now On, Singapore Power is NOT the sole supplier of electricity?

Yes and No. From now on, a consumer, individual household or business, can buy electricity from Singapore Power and many other retailers. So you can say that SP is not the sole supplier of electricity.

The reality is that SP operates the SP Grid, which supplies electricity to consumers. So SP is still the only supplier of electricity.  

The 22 electricity retailers buy electricity at wholesale prices from SP Grid, and sell to consumers at retail prices.  But the physical supply of electricity still comes from SP Grid, which is the sole power grid in Singapore.  You can say that the retailers are just administrators and not the physical suppliers of electricity. 

4. Why let so many electricity retailers come in when in effect these retailers don't really sell electricity?

The government lets so many electricity retailers come in is to create competition so that they can deliver more innovative and cost-effective solutions to consumers.  These electricity retailers don't sell physical electricity, they sell electricity packages.  

5. Does Competition Really Lead to Benefits for Consumers?  I don't see this now in the mobile phone market, TV market, bus market etc

Anybody that has some common sense knows that competition always leads to better deals for the customer.  Since the market opened for residents in April 2017, about 47% of households have made the switch away from SP to the 12 retailers. They enjoy 24% savings in electricity bills every month.  Check with your electricity retailer or text me Andy at 93672286 to find out how much you can save when you do the switch. You can also read my article at https://andyngtrainer.blogspot.com/2018/10/singapore-open-electricity-market-how.html

6. I Still Don't Understand.  How come the electricity retailers' rates are so much better than SP?  Isn't SP a government body and if now the retailers are offering much lower prices, does this mean that all along SP has over-charged us?

According to Energy Market Authority (EMA) Director Ms. Dorcas Tan (see Straits Times 23 Jan 2019 page B9), the regulated tariff, charged by SP and approved by EMA, reflects the long-term costs of producing and delivering electricity in Singapore, such as the costs of building and operating the power plants and maintaining the power grid and power meters.

On the other hand, the electricity rates offered by retailers typically reflect the current market conditions, level of competition, and short-term costs of producing electricity. 

Under current market conditions where electricity production capacity exceeds the demand for electricity, we can expect market prices to be lower than the SP regulated tariff.  

However, this may change over time based on market demand and supply.  So there is no assurance that in the long term, the rates offered by the retailers are lower than the SP regulated tariff. 

All this means that SP did not over-charged its customers. It also means that if you now find a cheaper retailer, make the switch now to save money now to reduce uncertainty. 

7. OK, I believe your arguments.  Now that the retailers offer so much lower rates, can I as a consumer make the switch?  If so, what are the procedures?  Must I contact SP about this?  What if SP does not allow me to switch?

Yes, as a consumer, you can now make the switch provided you qualify. 

The procedures are very simple: choose the right retailer and right package and then switch.  You don't need to contact SP about this as the retailer will do the application for the switch on your behalf.

No, SP will not disallow you to switch away from them.  They may disallow you to switch if you have a few months' bills owing to them.  

Written by Andy Ng, Author Trainer Coach since 2001. 

Bonus: Only One Reason To Switch: Save Money

You save guaranteed and confirmed 16% if you opt for the (Discount over Tariff plan, which gives 16% off whatever rates you are paying now.  

Even if go for the fixed price plan, which means you can save 13% over the current rates under Singapore Power or SP.  For example, in this current quarter of Oct to Dec 2021, the SP rate is 24.11 cents kWh.  One retailer Tuas Power Supply offers a low fixed rate of 21.03 cents kWh for a 2-year or 3-year contract, and you get to save 13% off the SP rate.   Plus, you'll get a $50 or $80 one-time bill rebate when you switch to Tuas Powe. 

Note: 

To know how to switch, email me Andy at andythecoach@gmail.com or text me at 93672286  now! Our team of energy consultants will help you select the plan that saves you the most, plus reward you with a high one-time Bill rebate of $80 (for 3-years plan)