Switching to a new Open Electricity Market Supplier - 12 hidden costs they do not tell you




If you have not done the switch to a new Open Electricity Market ( OEM) Supplier, you have to read this first.



If you have not heard, all residents in Singapore are now allowed to change their Electricity Supplier from Singapore Powers to one of the 13 retailers offering a better option. For someone living in the central region, you would probably heard from your friends from Jurong savings a pocketful of change every month with a switch and taking a holiday from the amount saved. Thankfully, you could do the same now.

But wait, don't go for the cheapest OEM supplier. There are some hidden costs you have to be aware of before the switch. It could mean changing your holiday destination from the money save from a night in Bangkok to a week in Phuket.

Here are the extras you need to consider before making the switch

  1. Account Closure Fee
  2. Administrative Fee
  3. AMI Meter Installaion
  4. Auto-Renewal Clauses
  5. Carbon Tax
  6. Early Termination Fee
  7. Late Payment Fee
  8. Paper bill
  9. Security Deposit
  10. Standardised vs Non Standardised Plan
  11. Transmission Loss Factor
  12. U Save GST Voucher

1 Account Closure Fee
If you choose to terminate your account , there may be an early termination fee and an addition account closure fee of $10.70 ( with GST). This fee is charged by SP Services.

2 Administrative Fee
This is a 'blackbox' fee. We called it blackbox as it is something that is not told to you clearly upfront. You would one that may need time finding before you can locate in. There are no regulation for this so it could be anything!

For example, iSwitch charges $4.95 (excl GST) administrative charge PER MONTH as per their website




Source :  iSwitch



Tuas Power is another example. They charge a one-time administrative fee of $53.50(With GST) is the applicants signs up on behalf of the account holder and fails to provide then with mandatory supporting documents. This could men if you do not provide the necessary documents during a sign up a the road show, you might need to pay the extra fee!
Source: Tuas Power


Geneco has a charge of $5.35(with GST) processing fee if there are any subsequent change to contract.
Source : Geneco

(Source : Geneco)

The best way to confirm the charges is to read the factsheet of the different companies before you sign up . Factsheets are provided


3 AMI Meter
Currently most household meters are read on a bi monthly basis manually ( yes someone actually goes down to check your house meter every other month) . The electricity usage for alternate month where the meter is not check will be estimated.

With the AMI meter, you could actually monitor your half hourly usage via SP Utilities app. However, if you do not have an AMI meter and choose to install it, it will cost $42.80 (with GST) and will be installed by SP Group.

For those choosing pay as you use plan, it is recommended to get the AMI meter for billing. That would cause you extra. There is a plan by SP group to install it islandwide eventually, but it would be a long process. Keep this is mind when choosing plans requiring AMI meters. There are retailers who would include AMI meter as foc for selected plans.

4 Auto-Renewal Clauses
You could find the terms for auto-renewal on your factsheets. Most plans will be on auto-renewal clause. You will be notified by your retailer at least 10 business days before the expiry of your existing contract of the renewed electricity rate. This would usually be lower than the prevailing tariff at point of renewal but not necessary similar to your original terms
Source: Keppel Electric
You would have to notify your retailer if you decided to continue, otherwise it will be continued automatically and you may face a unfavorable rate or be locked in contract. Do note early termination of contract would usually result in hefty penalties.

5 Carbon Taxes
Under the Carbon Pricing Act (CPA) effective since 1 Jan 2019, we are subjected to Carbon Tax as users.

Carbon Tax charge is calculated as follow
Carbon tax Charge = Electricitiy consumed x GEF-OM * x Carbon tax rate
*GEF-OM is the Grid Emission Factor Average Operating Margn set by EMA

If the above sound too complicated, for a atypical 4-5 room flat, the carbon tax should be around $0.60-$0.8 monthly.

Some retailers may choose to absorb this tax while others will pass on the cost to the user.

6 Early Termination Fee



If you decided to stop your plans, there will be early termination fee. These termination charges are not regulated and differ from retailers. Some would charge a fixed rate while others charges a variable amount base on the term of contract.

If you foresee yourself moving house and need to terminate early, it may be wise to compare the termination fee to see if which retailer offers the best rates for your circumstances. For example, under BEST , if you terminate at 20 month of a 24 month contract, you only pay 4 months penalty at $171 ($42.8 x 4) vs a fix rate $321 of by Seneko Energy

Source : Geneco
It is also interesting to note that if you shift house and have to terminate your contract, some retailers like Geneco  would refund the charges  if you take a new contract with them after you move to your new address. This may not be the same for others, so read the terms and conditions carefully



7 Late Payment Fee
This is a charge by almost all retailers at 1% per month on unpaid outstanding. Do not let it ballon or it may end up much worse than you could imagine


8 Paper Bill
For retailers with e-bills, there are no extra charges. Some retailers such a Best Electricity and Ohm Energy have integrated SP Group Bill, so you need not pay anything extra. Other like Seneko and Keppel Electric charges $2.14/bill for their paper bill if you opt in for it.
Source : Keppel Electric


9 Security Deposit
Some retailers charge security deposit. You are required to pay up to twice your average monthly electricity bill as security deposit. This is technically not a fee as deposit will be refunded back to you in credits when you terminate your account to be put in your last bill.

The deposit collect varies for each retailer. For example, the deposit collected by Sembcorp Power will be as follow
Source: Sembcorp Power

Not all retailers collect security deposit. Geneco and Senoko currently waive this .

10 Standardised vs Non Standardised Plans
Retailers offers both standardized and non standardized plans. The main difference is that non standard plans have terms unfavorable to buyers as it allows them to change pricing and fees in the future. For peace of mind, it is best to stick with Standardised Plans
Source: Keppel Electic

11 Transmission Loss Factor
Do you know that when electricity is delivered to your home, a percentage is lost in transmission. Currently, most retailers are absorbing this TLF. This means you are not accountable for the electricity lost in transmission. This may change in the future



12 U Save GST Voucher
For 2019, you may have a U-Save GST voucher that you could use to offset your electricity bills. However , this would apply to SP Group bills first before any excess after settling your water and gas bills is use to pay your electricity retailer.

With the knowledge of the hidden cost, which OEM supplier will you choose. Given the difficulty of getting the right information, it may not necessary be a clear cut decision base solely on price.

Guide to choosing your OEM supplier

We had set out a guide to choosing the OEM . The guide may be useful to you when it comes to selecting the right OEM supplier for you.

We ended up with Geneco as our OEM supplier. For Geneco, they do not collect security deposit, absorb TLF and allow refund of termination rates if you go back to them when you move house. Coupled with the best rates in town AND a rebate of up to $138 , it was an easy decision for us.

Here is s brief summary of the rebates.
Promo Code Rebate : GET68  - $68
Referral Rebate : 8154 2233 - $20
Credit Card Rebate if paid monthly by cc - 6% UOB One card 12 month rebate + $10 UOB Rebate or $40 Amex Rebate
  
Total savings of greater than $200 * per signup!

*Assuming $150 usage per month + UOB One Card Offer
(Rebate $9 per month , total $108. Net Savings $68+$20+$10+$108 = $206)
  

For more information, do check out why we choose Geneco for our OEM.

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