Gone are the days that everyone just stick to SP Power for our electricity consumption. Starting 1 Nov 2018, we can start choosing our own (Open Electricity Market) OEM plans as it will be extended to all consumers across Singapore by zones.
What is the Open Electricity Market (OEM)?
According to Openelectricitymarket.sg, Open Electricity Market will give consumers more choice and flexibility, while enjoying the same supply through the national power grid.
It is the same concept behind like the Telcos. In the not-so-distant past, Singapore can only sign up mobile plans with Singtel. After the government opens up the Telco market for competition, we see M1 and Starhub coming in; not to mention the incumbent 4th Telco too.
Why You Need to Change Your OEM Plan?
Because its definitely going to be cheaper!
Under the OEM, consumers can now shop for electricity plans from a wide range of electricity retailers. As of 1 Nov, there are currently 13 of them and each one of them will offer discounted prices up to 22% or innovative offers amid the intense competition.
Sourced from Ema.gov.sg
A simple example:
If you use 430 KWH (average consumption for 5 room HDB), you will be paying S$111.03 for your electricity bills.
However, if you switch to for example – iSwitch, you can shave off S$23.31 from your bill and pay only S$87.71!
When Should You Change Your OEM Plan?
There are currently 2 mainstay plans for 12/24/36 months:
- xx% Discount off Regulated Tariff (usually 15-22%)
- Fixed Rate (much cheaper like $0.18+/kwh versus SP Power’s $0.25/kwh)
A quick comparison of the OEM plans show that fixed rates’ plans are around 10% cheaper than their variable conterparts.
Take Geneco for example, a 1 year variable plan indicates a 19% discount off Tariff Plan. At the current S$0.2582 tariff by SP Power, it results in S$0.209/kwh.
Its current 1 year fixed plan is charged at S$0.182/kwh, around 13% cheaper.
On the other hand, if you take the 2 years fixed plan, your rates come down to $0.1798/kwh, a 30% off the current $0.2582 tariff!
As such, it makes sense to go for a long fixed term plan if the tariffs are at an all time low. With these in mind, i went to check out the components that make up the tariffs plus the history rates.
Here’s what i found out:
Click to Enlarge
Energy costs make up approximately 76% of the Tariff rates and 22% goes to SP Power as Network costs (they provide the power grid).
Given that the Network costs is somewhat fixed, we can only play our hands on the Energy costs. And I discovered that the Tariffs have a high correlation to the oil prices.
Oil prices are at an all time low (below US$50) in the 1st quarter of year 2016. This explains why the tariffs cost only 18.92 cents in Apr 2016. That said, oil prices have come down from US$80 to around US$56+ as we speak.
Thus, my opinion is that tariffs will come down significantly in Jan 2019 (its reviewed quarterly) and that would be a good time to sign up for the 2 years contract.
How to choose the Best OEM Plan
With the decision to go for a fixed rate plan, I explore 2 quick ways to compare the retailers and drill down into the ‘chosen’ one.
1st Method – OEM Plans’ Comparison
I went to the official website – https://compare.openelectricitymarket.sg/#/home and do a price comparison of the electricity retailers.
1st up, I key in my housing type and Average kWh consumption (mine is way lower cos we don’t use the Air-con…)
Next up, i go for only Fixed Plan.
Then I saw that the top 5 lowest rates are as shown:
2nd Method – Checking the Reviews
Following which, i did a check on the reviews over at Seedly’s platform:
I further narrow down to Ohm and iSwitch and Geneco.
Lastly, some additional factors are included to select the best OEM plan (you can use them too):
- Easy to Understand website
- Good customer service/Good reviews
- Integrated Bill with my existing SP Bill (hardcopy preferred)
- No Hidden Charges
- Referral Code
Conclusion
iSwitch has this $4.95 service charge which is above and separate from the electricity rate applicable for all their plans. A no-no for me!
Whereas Geneco’s bill will be a separate e-statement bill, which doesn’t suit me as well.
All in all, I crown my champion electricity retailer – Ohm Energy!
That said, i will probably wait until the January package to come live before i make the change to a 24-months fixed contract.
So, what about you? What are the things you consider when choosing your OEM plan? Let me know your answers in the comments below.
*Update*
I just signed up with Ohm.sg and here is my referral code – OHMREFB44E5A
When you use the code above when you sign up with Ohm, we’ll both get $20 off your electricity bill. Win-win!
You can also reach out to me @ smallcapasia@gmail.com if you have any queries on choosing an electricity retailer.
Disclaimer: This article is not sponsored by Ohm Energy and all opinions here are of my own view. Please do your own due diligence.
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