It is disappointing that electricity retailer Red Dot Power has thrown in the towel even before the game had begun (Red Dot Power exits electricity market in S'pore; Jan 5).
I question how the Energy Market Authority (EMA) issues licences to electricity retailers.
Why are there only 13 retailers participating in the open electricity market (OEM) when there are 22 electricity retailers in Singapore?
Is there a penalty for retailers who decide not to participate in the OEM?
Also, is there any penalty for retailers like Red Dot Power who exit the market after signing up customers? Since the company cited financial challenges for its departure, I would like to know how EMA evaluates the financial status and viability of a retailer before issuing it a license.
The standard process when a retailer ceases operations is for customers' accounts to be transferred to the SP Group, where they will be billed according to the regulated tariff.
The customer may therefore not receive the electricity rates promised by the now-defunct retailer.
I suggest that EMA appoint an agent to honour the electricity rates until the end of the contract signed, should a retailer cease operations.
Tan Teck Lee