How are new retailers able to offer better prices than SP Group?

I am sure I am not the only one wondering about the comment made by Energy Market Authority chief executive Ngiam Shih Chun (All households, firms to get choice of power retailer; Sept 22).

He said: "Those who switched paid an electricity rate which was on average about 20 per cent lower than the regulated tariff."

How is it that the 12 retailers are able to offer rates that are on the whole cheaper than the incumbent SP Group? As the dominant supplier in Singapore for decades with at least 1.4 million customers, why was SP Group not able to offer rates lower than the new retailers, who have much fewer customers?

Also, I do not understand the need to create artificial competition for the sake of competition.

Simply give every customer the best rate and lower the cost of living for businesses and consumers in Singapore. Why create unnecessary middlemen, which will add to the cost of supply?

I still remember the days when competition was created for the print and broadcast media only for them to revert to the earlier situation after some years. For lower costs, we just need to keep things simple.

Max Leong

A version of this article appeared in the print edition of The Straits Times on September 25, 2018, with the headline 'How are new retailers able to offer better prices than SP Group?'. Print Edition | Subscribe