Yahoo Finance Should I Switch Electricity Retailers? 5 Most Common Questions Answered
The Open Electricity Market (OEM) has been in effect ever since 1 May 2019. Everyone in Singapore can choose their preferred electricity retailer. In theory, it sounds wonderfully liberating: Yay, cheaper electricity! We’re no longer “stuck” with Singapore Power
(SP Group)! We are free!
But would you believe that back in 2019 when it came down to the actual switching of accounts from SP Group to Sembcorp I almost gave up? And just to be clear – it has nothing to do with Sembcorp as a retailer. I just had to manage so much paperwork that it made me reconsider if the savings were worth it.
By default, everyone receives power from Singapore Power (SP) Services. There’s no “deadline” because it’s not like there’s a blackout waiting to happen if you lay idle. If you don’t do anything, you’ll just pay for your supply at the electricity tariff set by the Energy Market Authority (EMA), which sadly, went from being the only option to the most expensive option.
Eventually the ~25% monthly savings pushed me to get it over and done with, but it was an emotional roller coaster because I was a complete newbie at this “utility bills” thing.
That said, if you ask us, the recommendation will always be to switch to a new electricity retailer – it will be leceh, but you can shave up to 30% off your electricity bill, so it’s stamp-plus-chop the MoneySmart thing to do.
Should I switch from SP Group to a new electricity retailer?
If you’re apprehensive about making the switch, here’s some help. These are some of the top questions people ask SP Group, as provided by well, SP Group. Hopefully it’ll put your concerns and doubts to rest. If you’re completely new to the OEM, you can check out these articles first:
Open Electricity Market (OEM) Singapore – 10 Important Things to Know
Electricity Prices in Singapore – 9 Hidden Costs To Watch Out For
Electricity Retailers in Singapore – Which Offers the Cheapest Electricity Price Plan?
Disclaimer: This is not an advertorial, and we are in no way paid or compensated by SP. This is put together because we believe it will be helpful for homeowners in their journey of shopping for a new electricity retailer.
1. Why can’t SP charge lower than electricity retailers?
This is a common question because duh – since SP is the “official” provider shouldn’t their prices be more competitive?
According to SP, they are the “national grid operator”, and not an electricity retailer per se. They are a “market support service licensee” whose job is to “ensure a reliable supply, transmitting and distributing electricity to all customers regardless of their choice of retailers”. It is not to give you low prices – that’s the role of the OEM.
That’s the reason they give for following the regulated tariff. The EMA-approved tariff looks at the “long-term cost of producing electricity and factors in the cost of maintaining and operating the grid”.
On the other hand, electricity retailers are free to employ whatever strategy they want for your business. They can price their electricity however they want, and work with other providers (like insurers) to come up with promo bundles.
Well, that’s the official answer. Whether you accept it is up to you. As for me, I don’t really think too much about these high-level business nonsense. All I’m concerned about is the price and reliability of my power supply. And since there’s no change in the latter, I just went for a cheaper retailer. If you think the tariff is too high, you should do the same.
2. When will my security deposit be refunded after I switch to a new electricity retailer?
Whether you remember it or not, once upon a time you paid SP a security deposit when setting up your utilities account ($40 to $400, depending on your type of residence). So what happens to that money when your power changes hands…?
According to SP, your security deposit is split between your electricity (65%) and non-electricity (35%) utility accounts. The electricity portion will be used to offset whatever remaining charges you have with SP Group.
For example, you live in a 4-room HDB flat and you paid $70 security deposit to SP Group. You decide to switch retailers mid-month, and have $40 in terms of electricity bills to pay. $45.50 of the $70 security deposit is allocated to electricity, so it will be used to offset that $40 you owe.
Thereafter, the remaining $5.50 will be used to offset your other utility bills. If you don’t want that, you can also request for a refund, but it’ll take 2 – 3 weeks to process.
3. Why am I receiving two separate bills? I’ve switched to another electricity retailer!
Many consumers forget that when you switch retailers, you’re breaking up the SP family. Most retailers do their own billing, so you will receive 2 utilities bills in total: one from your retailer for your electricity consumption, and another from SP Group for water, gas and refuse.
However, although it’s not always very clearly indicated, some retailers use SP Group for their billing-on-behalf services. That simply means the retailer doesn’t bill you, SP does so on their behalf. In that case, you should only receive one consolidated SP bill for electricity, water, gas and refuse.
4. Why do I have to submit a meter reading? Is it compulsory?
When you change to a new electricity retailer, you will be asked to submit your meter reading. No, it’s not compulsory, but you should do it anyway. That way, your bill will accurately reflect your consumption. You can submit it through the OEM website or the SP Utilities app.
If you don’t, your first bill with your new retailer will be an estimate based on your past electricity consumption.
5. What is an AMI meter? Why do I need to pay for it?
In case you’re not sure what an AMI meter is, it is an advanced metering infrastructure meter. It measures your consumption at half-hourly intervals so you can stalk your usage every 30 minutes online (via e-services). But beyond catering to the needs of fanatical consumers, an AMI meter means you will get accurate bills every month (instead of estimates when a reading is not taken).
Most homes still use the cumulative meter, which records readings only once every 2 hours, and requires someone go down to check the reading once every 2 months. According to SP, all electricity meters will be changed to AMI meters progressively. However, if you gan chiong spider and want to opt-in for an AMI meter before that, there will be a charge of $40 (excluding GST).
Have you switched from SP Group yet? Tell us why or why not!
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Original article: Should I Switch Electricity Retailers? 5 Most Common Questions Answered.
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