Electricity retailers should offer innovative, transparent packages

Discounts can obscure the actual price a consumer is paying for electricity.
Discounts can obscure the actual price a consumer is paying for electricity.PHOTO: ST FILE

I notice that electricity retailers are fond of using marketing gimmicks like free electricity and cash rebates to sway consumers.

Those who take the time to compare between retailers often find that the net price ends up being more or less the same.

Retailers need to offer more innovative packages. For example, a retailer could offer free installation and maintenance of solar panels in return for a fixed contract. The power generated could be stored in a battery and fed into the grid, benefiting the retailer.

Retailers could also explore an "all-you-can-eat" tariff, where they use a customer's historical consumption data to determine a fixed amount the customer pays in return for unlimited electricity consumption - like that offered by Centrica, a British multinational energy and services company.

Customers also often find packages to be too opaque. Discounts can obscure the actual price a consumer is paying for electricity.

And bundling electricity use with another product such as a phone line can make it difficult for a customer to distinguish between what he is paying for electricity and what he is paying for the other product.

Consumers want tariff structures that are less, not more, complex.

The authorities should require retailers to inform consumers exactly how much they are paying under "discount" deals, and to advertise in ways that make prices easier to compare.

They should require retailers to give adequate warning to consumers when a contract is about to expire, and inform them how much they would have to pay if they decide not to act on the expiring contract.

The authorities should also encourage retailers to provide data on their profit margins to an independent body.

Cheng Choon Fei

A version of this article appeared in the print edition of The Straits Times on March 09, 2019, with the headline 'Electricity retailers should offer innovative, transparent packages'. Print Edition | Subscribe