It has been six months since the Open Electricity Market (OEM) was launched nationwide on a zonal basis. This month marked the opening of the final zone, and all consumers are now able to buy electricity from a retailer of their choice.
While the OEM allows households to enjoy competitive pricing and potentially save on their electricity bills, some may still wonder how the initiative works and what the benefits are.
Let’s clear up five common misconceptions about the OEM.
Myth #1: I must sign up with an electricity retailer in the OEM.
No, you need not make any changes to your current arrangement of buying electricity from SP Group at the regulated tariff. The OEM is about you, the consumer, having a choice on who you wish to buy electricity from.
So whether you switch to a different retailer or stay with SP Group, it’s up to you.
You can also choose to make the switch anytime in the future as there is no deadline for switching.
Take the time to understand your options before deciding whether to switch or stay. You can find out more here.
Myth #2: If I don’t switch to a retailer, my electricity supply will be cut off.
Definitely not true. You will not lose your electricity supply if you do not switch to a retailer.
Regardless of who you choose to buy electricity from, your electricity supply stays the same. You will continue to receive electricity via the national power grid operated by SP Group.
Myth #3: Apart from the monthly electricity rate, retailers can impose other recurring charges in their Standard Price Plans.
The electricity rates offered in all standard price plans must be all-inclusive. This means you pay the rate as stated by the retailer and there should not be any additional recurring charges during the contract duration.
Compare all the retailers’ standard price plans using the Energy Market Authority’s (EMA) Price Comparison Tool.
Depending on a retailer’s business strategy, however, it can choose to offer non-standard price plans which may include additional recurring fees such as monthly service fees or electricity rates that vary with your electricity consumption (peak and off-peak price plans). Should you decide to sign up for a non-standard price plan, be sure to read the price plan’s Fact Sheet carefully and find out more about the additional charges.
Myth #4: If my electricity retailer exits the market, my electricity supply will be disrupted.
This is not true at all. Your electricity supply will not be disrupted if your retailer exits the market. You will continue to receive your electricity supply from the national power grid.
If your OEM retailer exits the market, they are first required to find another retailer who is willing to take over your account and offer the same terms and conditions.
In the event that they cannot find a replacement retailer or if you reject their proposed offer, you will be transferred back to the SP Group. You are free to switch to a new retailer thereafter if you wish to do so. Rest assured that there will also be no disruption to your electricity supply during the transition period.
Myth #5: A friend told me his electricity bill went up after he switched to a retailer which offers lower electricity rates. Is this possible?
Your friend's bill may have gone up for several reasons.
Electricity meters at your home are read once every two months. For months which your meter is not read, your electricity bill will be based on your estimated electricity usage. Your bill will then be adjusted in the following month to reflect the actual usage.
This is why your March bill, for example, may be higher — or lower — than your April bill.
Another reason for the difference in your electricity bill could be due to the billing cycle. Your first bill from your new retailer may be pro-rated, and this means the following month’s bill will be higher as it will cover a full month of your electricity consumption.
Also remember that your electricity usage tends to go up in some months: during the school holidays when there are more people at home or when the weather is hotter and you use the air-conditioner more.
Have more questions about the Open Electricity Market? Visit the Open Electricity Market website or call 1800-233-8000 for more information.