[2021 Edition] Complete Guide To Choosing The Best Open Electricity Market (OEM) Plan For Your Home

This article was first published on 1 October 2018 and updated to reflect the latest prices.

It has been 2 years since the Open Electricity Market (OEM) was launched nationwide, and until today, less than half of residential households have switched away from SP Group.

This means that these households have been paying the tariff rate over the past 2 years – and will likely continue to do so for the foreseeable, since neither incentives, educational outreach, nor the lack of major issues for OEM customers have seemed to convince them to make the switch.

But for the rest of us, here is an overview of the choices available so you can make the best choice for your needs – whether that’s for your new home, or your existing OEM contract expiring and you’re wondering what available plans are right now.

Read Also: Open Electricity Market (OEM): Here Are 5 Things To Consider When Choosing The Right Electricity Retailer

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 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. Retailers, including SP Group, then buy electricity in bulk from the wholesale electricity market to supply to consumers.

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. The company is also responsible for the infrastructure for reliable power delivery island-wide and billing households for 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 is revised every quarter and 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.

Read Also: 5 Questions About The Open Electricity Market That You (And Your Parents) Probably Have

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.

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

Diamond Electric

Geneco by Seraya Energy

iSwitch

Keppel Electric

Ohm Energy

PacificLight Energy

Sembcorp Power

Senoko Energy Supply

Sunseap Energy

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 for Singapore residents.

# 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 two 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, some 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.

Read Also: 3 Types of Insurance Every Homeowner Needs To Know About For Protecting Their Home

# 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.

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 offer two types of plans: 1) Discount Off Regulated Tariff, 2) Fixed Price.

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.

Source: 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.

Source: Energy Market Authority

Peak and Off–Peak plans were offered to Jurong residents, but has since been withdrawn when the OEM rolls out nationwide, due to the lack of interest among consumers. Retailers could still offer Peak and Off-Peak plans, but these will be classified as “Non-Standard” plans.

Under this scheme, you pay 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 significant savings.

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

Best Discount Off Regulated Tariff Plans Across OEM Retailers

As of 10 May 2021, these are the Discount Off Regulated Tariff Plans offered by the various retailers:

For those who want a short contract (6 months), the SUNSEAP-ONE (1% Solar Energy) 6M gives the highest percentage discount of 21%.

Short contract durations can be a double-edged sword. On one hand, a shorter-term contract 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.

For a 12-months contract, Senoko Energy’s LifeSave 12 gives the highest discounts of 25%.

Finally, those who prefer longer-term certainty (24 months), Tuas Power’s PowerDO 24 Care and Union Power’s Power Saver 24 give the highest discount off tariff of $23.61%.

Best Fixed Price Plans Across OEM Retailers

As of 10 May 2021, these are the Fixed Price plans available, which you can compare below:

The best rate for the mid-term (12-months) is 18.28 cents/kWh, from Union Power’s Union Saver 12.
The cheapest rate for a 6-month contact is 16.98 cents/kWh, offered by Geneco’s Give Us A Try.

And if you prefer to lock in the fixed rate for the long-term, consider Union Power’s Union Saver 24, which gives the best deal at 18.37 cents/kWh for a 24-month contract.

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.

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.

Source: SP Group

The Current Regulated Tariff is 24.13 cents per kWh with GST (effective from 1 April to 30 June 2021)

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).

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)

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.

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, and not merely the free gifts on offer.

Read Also: Biggest Reasons Why Singaporeans Haven’t Switched To An Open Electricity Market (OEM) Retailer – And Why They Really Should

DollarsAndSense.sg aims to provide interesting, bite-sized and relevant financial articles.

Learn together with like-minded Singaporeans at the Personal Finance Discussion SG Facebook Group by discussing a range of personal finance topics.

If you have not done so, subscribe to our free e-newsletter to receive exclusive content not available anywhere else.