A complete guide to choosing the best Open Electricity Market (OEM) plan for your home

A complete guide to choosing the best Open Electricity Market (OEM) plan for your home
PHOTO: The Straits Times

Prices are updated as of 30 September 2018.

You might have heard that starting next month (November), residential households islandwide will be able to pick from a variety of electricity retailers to buy electricity from. For most of us, this can be a little unnerving and confusing, since have been buying power from just one company – SP Group. What does it mean to buy electricity from a company other than SP Group? Will electricity reliability be affected? Is it compulsory to switch?

With the impending launch of the Open Electricity Market island-wide, Singapore households will be able to choose from 12 electricity retailers, each offering multiple plans.

Here is what you need to know about the Open Electricity Market, and an overview of the choices available so you can make the best choice for your household’s needs.

5-Minute Explanation: How Electricity Is Produced And Sold In Singapore

In order to understand what an electricity retailer is, we first need to understand the how electricity is produced and sold in Singapore. The Singapore energy market has always been an eco-system made up of multiple players.

Everything starts with the electricity produced by power plants, which are owned and operated by power generation companies. Every half an hour, these power generation companies bid for contracts to generate and sell specified quantities of power on the wholesale electricity market. Based on forecasted demand and storage capabilities, SP Group, who was previously the sole buyer of electricity in Singapore for residential households, then awards contracts to produce power based on a least-cost solution.

The electricity generated is then transmitted from the power plants and distributed across the island on the national power grid, which is also operated by SP Group.

In other words, SP Group buys electricity in bulk from the power generation companies on behalf of Singapore households, is responsible for the infrastructure for reliable power delivery island-wide, and bills households for the electricity consumed.

To ensure consumers are protected, prices that Singapore households pay is based on the tariff set by the Energy Market Authority (EMA), with the aim of being as low as possible while allowing SP Group to cover operational costs.

The tariff consists of two parts: 1) fuel cost and 2) non-fuel cost. The fuel component is based on natural gas prices in the preceding quarter, while the non-fuel component covers the cost of running the electrical infrastructure and support services like meter reading.

In effect, the tariff system insulates Singaporeans, to some extent, from the electricity production and purchase process, and from near-term price fluctuations due to the global oil market, since 95% of Singapore’s electricity supply is generated using imported natural gas.

What Is The Open Electricity Market (OEM)?

The Open Electricity Market (OEM) is part of EMA’s effort to liberalise the electricity market, allowing residential households in Singapore to buy electricity from retailers other than SP Group.

Think of this as similar to how different telecommunication companies in Singapore such as SingTel, M1, Starhub and Circles.Life offer different price plans in order to attract different kinds of customers.

On 1 April 2018, OEM was soft launched, allowing more than 100,000 Jurong households to choose their preferred electricity retailer and plan. Consumers in the rest of Singapore will enjoy the same choice when OEM rolls out nationwide in phases from 1 November 2018. This will involve 1.3 million mostly household accounts.

To be clear, SP Group continues to operate the national power grid, so you can be assured of the same reliable power that you come to expect living in a Singapore. For those who choose not to do anything, SP Power will continue to sell you electricity at the regulated tariff.

Here is the current list of electricity retailers that you’ll be able to buy their electricity from:

Best Electricity Supply

ES Power

Geneco by Seraya Energy

iSwitch

Keppel Electric

Ohm Energy

PacificLight Energy

Sembcorp Power

Senoko Energy Supply

Singtel (OEM section not yet available)

Tuas Power Supply

Union Power

Benefits Of The Open Electricity Market

The opening up of the electricity market for Singapore households come with a number of benefits.

# 1 More Choices For Electricity Plans

Compared to paying a fixed, quarterly tariff rate which is what SP Group offers, retailers allow you to choose from three types of electricity plans. Different plans give Singaporeans choices on how they wish to buy electricity and who they wish to buy it from. They have the potential of large cost savings for households who choose an appropriate plan based on their consumption habits.

# 2 Competition Leading To Innovation And Better Prices

Competition among retailers that essentially sell the same product (electricity) means that companies need to provide great service at great prices. Beyond price, retailers are also competing to value-add to their customers.

For example, PacificLight is giving customers free 12-month home insurance from Etiqa when they sign up for a 24-month home electricity plan. Other retailers are offering free months of electricity, referral cashback, and other promotional rewards.

As companies strive to differentiate themselves, we can look forward to even more offerings and perks, and to choose the one that makes the most financial sense for us.

# 3 More Awareness Of Energy Consumption

The introduction of OEM and the large numbers of retailers and plans should make Singaporeans more aware of the electricity market in Singapore and to take stock of their own consumption patterns.

Being more conscious about when we use electricity, how much power our appliances are using, and areas of wastage will hopefully lead to more considered electricity use, saving both money and natural resources over time.

When Will You Be Able To Make The Switch?

The nationwide roll-out of the Open Electricity Market will be conducted in phases, based on location.


Photo: Open Electricity Market

Overview Of Types Of Price Plans Offered By OEM Retailers

Before we compare the different standard price plans offered by each retailer, it’s important to first understand how each works. In general, retailers can offer any of these three types of plans: 1) Discount Off Regulated Tariff2) Fixed Price and 3) Peak And Off-Peak.

Here is how each type of electricity plan works.

1) Discount Off Regulated Tariff plans offer a discount off the prevailing regulated tariff price, which is revised every quarter.


Photo: Energy Market Authority

2) Fixed Price plans mean you pay a fixed rate throughout the duration of your contract. While the rate is not subjected to quarterly fluctuations based on the tariff, it may be higher or lower than the tariff over time.


Photo: Energy Market Authority

3) Peak and OffPeak plans charge different prices for electricity usage depending on the time of day. If your household’s electricity usage is skewed towards mainly off-peak hours, Peak and Off-Peak plans could potentially result in the greatest savings.


Photo: Energy Market Authority

Best Discount Off Regulated Tariff Plans Across OEM Retailers

* All prices are accurate at the time of writing and might be subject to change. Please contact individual retailers for the most updated pricing.

There are currently a total of 20 Discount Off Regulated Tariff Plans offered by the various retailers. Here are the various plans compared:

Retailer Name Of Plan Price Contract Duration
Best Electricity Supply BEST Home Saver 12 months 18% off regulated tariff 12 months
BEST Home Saver 24 months 23% off regulated tariff 24 months
Geneco by Seraya Energy Give Us A Try 23.80% off regulated tariff 6 months
Get It Less 12 19.00% off regulated tariff 12 months
Get It Less 24 21.00% off regulated tariff 24 months
iSwitch Super Saver Discount 1 Year 19.00% off regulated tariff 12 months
Super Saver Discount 2 Years 20.00% off regulated tariff 24 months
iSwitch2Green 18.00% off regulated tariff 12 months
Keppel Electric DOT 3 21.00% off regulated tariff 24 months
DOT 24 21.00% off regulated tariff 24 months
Ohm Energy Ohm Discount (6 Months) 20.00% off regulated tariff 6 months
Ohm Discount (12 Months) 22.00% off regulated tariff 12 months
PacificLight Confirm Save 18.00% off regulated tariff 24 months
Sembcorp Power 12M Discount Off Tariff Home 20.00% off regulated tariff 12 months
24M Discount Off Tariff Home 23.50% off regulated tariff 24 months
Senoko Energy LifeSave12 14.50% off regulated tariff 12 months
LifeSave24 17.25% off regulated tariff 24 months
Tuas Power Supply PowerDO 6 10.00% off regulated tariff 6 months
PowerDO 24 16.00% off regulated tariff 24 months
PowerDO (SG 53) 53.00% off regulated tariff for first 6 months, 10.00% off regulated tariff subsequently 24 months

Note that ES Power, Singtel and Union Power have not released their plans yet.

As you can see, Geneco’s Give Us A Try (6 months) plan offers the highest percentage discount off the regulated tariff at 23.80% (as of 30 September 2018). However, the short contract duration can be seen as a double-edged sword.

On one hand, it frees you up to choose another cheaper plan or even switch to another retailer after 6 months. On the flip side, the discount being offered may not be the same by the time you need to re-contract.

If you want to lock in the percentage of discount off the tariff price, the next best deal (as of 30 September 2018) is Sembcorp Power’s 24M Discount Off Tariff Home plan which provides a very attractive 23.50% discount off the regulated tariff over a period of 24 months.

Best Fixed Price Plans Across OEM Retailers

As of 30 September 2018, there are 20 Fixed Price plans available, which you can compare below:

Retailer Name Of Plan Price Contract Duration
Best Electricity Supply BEST Home Fixed 6 months 16.28 cents/kWh 6 months
BEST Home Fixed 12 months 17.50 cents/kWh 12 months
BEST Home Fixed 24 months 16.38 cents/kWh 24 months
Geneco by Seraya Energy Get It Fixed 12 17.80 cents/kWh 12 months
Get It Fixed 24 16.20 cents/kWh 24 months
iSwitch Chope’ The Rate 1 Year 17.80 cents/kWh 12 months
Chope’ The Rate 2 Years 17.50 cents/kWh 24 months
Keppel Electric FIXED 6 17.07 cents/kWh 6 months
FIXED 12 16.80 cents/kWh 12 months
FIXED 24 16.50 cents/kWh 24 months
Ohm Energy Fixed Ohm (6 Months) 18.15 cents/kWh 6 months
Fixed Ohm (12 Months) 17.95 cents/kWh 12 months
Fixed Ohm (24 Months) 16.95 cents/kWh 24 months
PacificLight Stick To It 17.78 cents/kWh 24 months
Sembcorp Power 24M Fixed Price Home 16.50 cents/kWh 24 months
12M Fixed Price Home 16.80 cents/kWh 12 months
Senoko Energy LifePower24 Online Promo 17.18 cents/kWh 24 months
LifePower12 17.99 cents/kWh 12 months
Tuas Power Supply PowerFIX 24 18.80 cents/kWh 24 months
PowerFIX 36 16.80 cents/kWh 36 months

The absolute cheapest rate (as of 30 September 2018), would be Geneco’s Get It Fixed 24 plan, which is at 15.99 cents/kWh for a 24-month contract.

For those who prefer a shorter tenure, the best 6-month Fixed Price plan (as of 30 September 2018) is Best Electricity Supply’s BEST Home Fixed 6 months, which offers a rate of 16.28 cents/kWh.

Best OEM Peak And Off-Peak Plan Across OEM Retailers

Comparing between the 6 Peak and Off-Peak plans is a little trickier, since not all vendors have the same definition of the “peak period”. Thus, there isn’t a definitive way to say which is the “best” plan.

 

Retailer Name Of Plan Peak Rate Peak Period Off-Peak Rate Contract Duration
Geneco by Seraya Energy Good Night 5.00% off regulated tariff 6am – 12 midnight 53.00% off regulated tariff 24 months
Keppel Electric Knight 18.80 cents/kWh 7am – 11pm 15.38 cents/kWh 24 months
PacificLight Energy Save While Sleeping ($) 18.07 cents/kWh 7am – 11pm 16.67 cents/kWh 24 months
Save While Sleeping (%) 23.00% off regulated tariff 7am – 11pm 13.00% off regulated tariff 24 months
Sembcorp Power 12M Sunshine Plan 23.65 cents/kWh 7pm to 7am 20.00 cents/kWh 12 months
Tuas Power Supply PowerWAVE 24 20.20 cents/kWh 7am – 7pm, Weekends and PH 19.00 cents/kWh 24 months

Choosing The Best OEM Retailer And Plan For Your Household

Now that you understand how the various plans work, you might wonder which one suits you best. Here are four steps you can take to answer that question.

Step 1: Examine Your Household Electricity Bill

The first thing you can do is to gather your past electricity bills. Since electricity consumption is generally cyclical, doing so will help you have a more accurate picture of your consumption patterns.

When going through your household electricity bills, note the highest electricity usage in a month, and then calculate the average monthly electricity consumed.

You can use the following table to help with log your results.


Month

Electricity Consumed
(kWh)

Electricity Bill ($)
October 2017    
November 2017    
December 2017    
January 2018    
February 2018    
March 2018    
April 2018    
May 2018    
June 2018    
July 2018    
August 2018    
September 2018    

12-month Average:
   

Step 2: Calculate Expected Costs

To help you along, you can also refer to information on historical tariff rates and compare against the rates on offer.


Photo: SP Group

The Current Regulated Tariff is 24.13 cents/kWh (effective from 1 October to 31 December 2018)

  • Highest tariff in past 24 months: 24.13 cents/kWh
  • Lowest tariff in past 24 months: 20.20 cents/kWh
  • Average tariff in past 24 months: 21.76 cents/kWh

Take your average monthly electricity consumption (derived in Step 1) and multiply that with rates given by the Fixed Price plan that you are considering. This is how much you can expect to pay when you’re on a Fixed Price plan.

Expected Fixed Rate Bill = Electricity Consumed x Fixed Rate Cost (per kWh)

Adding a column to your original table, you can see if you will be making savings (and by how much).


Month

Electricity Consumed
(kWh)

Electricity Bill ($)

Expected Fixed Rate Bill
October 2017      
November 2017      
December 2017      
January 2018      
February 2018      
March 2018      
April 2018      
May 2018      
June 2018      
June 2018      
August 2018      
 September 2018      

12-month Average:
     

To know how much you’ll be paying if you are on a Discount Off Regulated Tariff plan, look at what you are currently paying for your electricity (which is at the regulated tariff) and factor in the discount percentage given in the plan.

Expected Discount Off Tariff Bill = Electricity Bill – (Electricity Bill x Discount Off Tariff Percentage)


Month

Electricity Consumed
(kWh)

Electricity Bill ($)

Expected Discount Off
Tariff Bill
October 2017      
November 2017      
December 2017      
January 2018      
February 2018      
March 2017      
April 2018      
May 2018      
June 2018      
July 2018      
August 2018      
September 2018      

12-month Average:
     

Adding a column to your original table, you can see how much savings in dollar terms you would have made.

Using the results of both Fixed Price and Discount Off Regulated Tariff tables, you can see which type of plan will result in the greatest savings for your household.

You could consider a Peak And Off-Peak plan if you find that your electricity usage pattern falls within the Off-Peak timings set by the retailers. For example, if you are a heavy user of electricity during the off-peak hours, then a Peak And Off-Peak plan may make sense.

If you’re worried about making the “wrong” decision, then the simple sure-win proposition is to go for a Discount Off Regulated Tariff plan. By switching to a retailer with such a plan, you will enjoy immediate savings compared to sticking with SP Group.

Step 3: Read The Fine Print

After you identified what seems like the best plan for you, you can visit the retailer’s website and download the Fact Sheet for the plan (or plans) that you have in mind. This Fact Sheet will summarise the key contractual terms and conditions of the price plan, such as contract duration, payment terms, security deposit, early termination charges and auto-renewal clauses.

Another document to look out for is the Consumer Advisory which outlines the important things that you should be aware of before signing up with a retailer. Retailers are required to obtain your acknowledgement before contracting you as their customer. For most of the plans, there is usually a security deposit required, and there are early termination and late payment fees you need to be aware of.

As with all contracts, read the fine print carefully and ask the retailer to explain any of the terms and conditions that you are unsure of.

Step 4: Look For Discounts And Promotions

In a bid to attract new customers, retailers have been offering referral discounts and other perks. Some of these are limited-time or limited-quantity offers, and they should not be the driving factor for deciding to sign with a particular retailer.

Ultimately, choosing your electricity retailer and plan is an important decision that you should make based on your needs.

This article was first published in DollarsAndSense.sg.

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