SP Group's role in electricity industry

We thank the readers for their letters and the queries they raised (How are new retailers able to offer better prices than SP Group?, by Mr Max Leong; Maintaining cost savings tough in the long term, by Mr Goh Boon Kai; and Many concerns over changes in power market, by Mr Ong Soon Yam; all on Sept 25).

SP Group operates and maintains the electricity grid and provides market support services such as billing and meter reading.

Under the regulated tariff set by the Energy Market Authority (EMA) for the period of July 1 to Sept 30, SP Group is paid 5.71 cents per kilowatt hour (SP Component) for the above services, out of the 23.65 cents per kwh paid by residential consumers.

The remaining tariff components go to the generation companies, the Energy Market Company for market administration, and the EMA for power system operator costs.

Under the open electricity market, consumers will be able to buy electricity from retailers at the retail electricity price, instead of buying under the tariff set by the EMA.

The electricity price offered by retailers will also include the SP Component.

Whether consumers buy electricity under tariff, or through a retailer, the SP Component collected from consumers is the same. It is regulated by the EMA, and has been stable the past 10 years, even as the electricity tariff has fluctuated.

Chuah Kee Heng

Managing Director

SP Services

A version of this article appeared in the print edition of The Straits Times on September 29, 2018, with the headline 'SP Group's role in electricity industry'. Subscribe