Take-up Rate of Households Switching Over to Open Electricity Market
Ministry of Trade and IndustrySpeakers
Summary
This question concerns efforts to encourage household participation in the Open Electricity Market (OEM) and whether a target take-up rate exists. Minister for Trade and Industry Mr Chan Chun Sing reported that 48% of households have switched, which is higher than observed rates in other jurisdictions. He clarified that no target take-up rate is set because the OEM prioritizes consumer choice, as price plans and personal needs vary over time. Consequently, the Energy Market Authority focuses on consumer education and transparency, providing online price comparison tools and publishing retailer satisfaction ratings regularly. Mandatory Fact Sheets are also required from retailers to ensure that key contractual terms are clearly communicated to protect consumer interests during switching.
Transcript
31 Mr Chua Kheng Wee Louis asked the Minister for Trade and Industry (a) how does the Ministry intend to encourage the 53% of households still not on the Open Electricity Market to switch over, for electricity savings and lower price volatility; and (b) whether any target take-up rate has been set.
Mr Chan Chun Sing: As at end-September 2020, 48% of around 1.4 million households have switched to buying electricity from a retailer in the Open Electricity Market (OEM). This is significantly higher than the first-year switch rates observed in other jurisdictions, such as Japan, France and the UK.
The OEM was introduced to provide consumers with more choices in their electricity purchases beyond the regulated tariff. OEM retailers offer different price plans and services from SP Group, and may also impose different contract lock-in periods and charges. Retail prices also change over time and may rise above the regulated tariff in future. Consumers also have different needs, which can vary with time. Hence, the Energy Market Authority (EMA) does not have a target take-up rate for the OEM.
Consumers should consider their electricity needs and preferences, before making a decision whether to switch to OEM retailers. To this end, EMA's priority is to raise awareness and educate consumers about the OEM, including the options available, and the safeguards put in place to protect their interests. EMA ensures that retailers include all key contractual terms in a Fact Sheet during the contracting process. Consumers can also use EMA's online Price Comparison Tool (compare.openelectricitymarket.sg) to compare Standard Price Plans. In addition, EMA conducts regular Consumer Satisfaction Surveys and publishes the satisfaction ratings of each retailer regularly.