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8 Facts About the Electricity Tariffs Increase That’ll Kick in from 1 Oct

2018-09-30 , 3:59 pm

Lest you’re not aware, it’s announced on Friday that all Singaporeans above the age of 21 would be getting the SG Bonus. Depending on your income, we would receive $100 to $300, and the money would be disbursed by the end of the year.

And then, a day later, it’s announced that electricity tariffs would increase.

No wonder memes like this started to go viral.

But of course, if you think objectively, it’s just an unfortunate coincidence, because news of the electricity tariffs is expected somewhere around this period.

Read on and you’ll understand.

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What are Electricity Tariffs?

This is merely a high-SES term to refer to “bills”, though it’s technically not a bill. You might have heard of the word “tariffs” in the news recently, with the US imposing tariffs to China products. To some extent, the tariffs mentioned in the international trade are taxes

But to make things simpler, just think of electricity tariffs as electricity bills lah.

Why is the increase expected?

You see, there would be a review by SP Group, one of the key electricity suppliers here in Singapore, every three months. From April 2018, there was an average increase of 2.8%, and then from July 2018, there’s an average increase of 6.9%.

Both times, it was due to the higher cost of natural gas that produces electricity.

So it’s no surprise that in the next review, which takes place on 1 October, an increase would take place.

But read on because it might soon change.

What’s the increase this time?

This time, the increase would be from 1 October to 31 December 2018, and would raise by an average of 2.1%. The reason for the increase is similar to the previous increases.

Before April 2018, the cost is 21.56 cents per kwh – after three increases this year, it’ll be at 24.13 cents per kwh from 1 October onwards.

Good bye, air-con.

What’s the impact?

On average, your monthly bill would most likely increase by about 2%. If you live in a four-room HDB, you might have to fork out an additional $2 for your bills.

Here’s a breakdown by SP Group:

Increase (or if there’s a decrease) is regulated by Energy Market Authority

At this moment, most homes and offices in Singapore can only buy from SP Group, but the increase is done with guidelines from Energy Market Authority.

The Energy Market Authority, or EMA, is a statutory board under the Ministry of Trade and Industry. One of their roles is to regulate Singapore’s electricity and gas industries as well as district cooling services to promote fair competition while protecting consumers’ interests.

In other words, the increase isn’t suka suka done.

EMA Opening Up the Market Soon

Currently, most of us can only opt for SP Group.

You’ll realize I keep on saying “most”, because if you live in Jurong, you’d know that you might DGAF about this news as you can choose not to opt for SP Group as your main electricity provider.

That’s because EMA has a “soft launch” to allow other retailers to sell electricity in Jurong since April 2018.

According to a June 2018 report, industry estimates that about 10% has “jumped” to other retailers.

Here’s the thing: from 1 November 2018 onwards, more areas would be launched. But not all areas yet, though.

(Article continues below) Xing Xing is a 34-year-old Singaporean lady who decides to meet up with an online friend she found in Facebook. But it turns out that he’s not what he seems to be: Prepare boxes of tissue and watch the saddest Singapore Facebook love story here:

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Nationwide Launch of Open Electricity Market

Depending on where you stay, you would be able to buy electricity from other retailers either this year or next year.

Here’s the rollout schedule:

But since electricity tariffs increase is set by an EMA guideline, would prices from other retailers still be cheaper?

Well, with competition, anything is possible.

Creative Ways to Sell Electricity

Now, let’s take an example of PacificLight. Initially, the company just sold electricity to manufacturing companies lah, malls lah, etc – places that take lots of energy.

Since April 2018, they’re allowed to sell to people in Jurong, and here’s the thing: their prices are rather competitive.

At 17.78 cents per kwh for a 24-month contract (remember, the 1 October rate for SP Power is going to be 24.13 cents), the price is fixed at that amount for the duration. In addition, you can also opt for a plan that charges more during the day and less at night, as you most likely are using more electricity (air-con, Bro) at night.

There are more examples, but you get the drift; with competition, you can only expect one outcome: creativity flourish and prices drop.

After all, I bet my boss’s car that if not for competition, we would sill be stuck with 2 GB of data for $60 #justsaying

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