Concerns about new option to switch power retailers

As a consumer, I find the property analogy for explaining the electricity prices relatable (All households, firms to get choice of power retailer; and What you need to know about the market; both on Sept 22).

The electricity retailers offer three types of contract periods: six, 12 and 24 months, with choices of fixed and discounted rates.

For example, if I switch to a fixed price of 16.20 cents per kilowatt hour in a 24-month contract instead of paying the current price of 23.65 cents per kwh, I could save more than 25 per cent on my bill and not worry about oil price fluctuations and carbon taxes.

However, some retailers may pull out as competition becomes more severe. And I have some concerns.

It seems that there are no extra charges for households that switch from SP Group to another retailer, as there is no need to change the meters. What happens if these households subsequently switch retailers again?

There is no guarantee that electricity rates offered by retailers will remain at the current level.

As the Energy Market Authority is the regulator, will it guarantee that there is always a differential between retailer prices and regulated tariff?

In case a retailer pulls out, SP Group will continue to supply electricity. Would it honour remaining contracts at the same terms and prices until the end?

Judging by the trouble consumers faced over getting a refund of their security deposits from bike-sharing companies in Singapore and China, is it necessary for retailers to duplicate a security deposit as SP Group already holds a security deposit and households are a non-security risk?

Paul Chan Poh Hoi

A version of this article appeared in the print edition of The Straits Times on September 29, 2018, with the headline 'Concerns about new option to switch power retailers'. Subscribe