We refer to Mr Tan Teck Lee's letter in which he asked about how electricity retailers are licensed and whether consumers are protected when a retailer exits the Open Electricity Market (Protect consumers against electricity retailers that pull out; Jan 10).

The Energy Market Authority (EMA) assesses all electricity retail licence applications stringently.

The assessment criteria include management expertise, financial capability, risk management, customer service management and compliance with rules and regulations.

Participation in the Open Electricity Market (OEM) is not mandatory.

Retailers who wish to participate are required to undergo further evaluation and fulfil additional requirements set by EMA.

EMA has measures in place to protect consumers should a retailer exit the market.

Consumers will not face any disruption to their electricity supply as their accounts will be automatically transferred back to SP Group.

Consumers can also choose to switch to another retailer of their choice.

Residential customers' security deposits are protected by business insurance or banker's guarantees, and will be refunded to them after outstanding charges are deducted.

In addition, the exiting retailer is not allowed to collect early contract termination charges from their customers.

Dorcas Tan

Director

Market Development & Surveillance Department

Energy Market Authority