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Electricity Tariffs & Utility Bill


Market Development & Systems Charge


1.
What is the Market Development and Systems Charge (MDSC)?

The Energy Market Authority continually seeks to develop the electricity market for the benefit of consumers. These initiatives will enable both commercial and residential electricity consumers to enjoy more competitive electricity prices, increased retail options, and greater price transparency.

An example of such market development initiatives is the Electricity Futures Market, which was launched last April. This has enabled independent retailers with new business models to enter the electricity market offering consumers greater retail choices and price competition. For example, Town Councils have seen their electricity bills come down in new tenders. (Please see Question 2 for more details.) Another example is the opening up of the electricity retail market, known as the Open Electricity Market initiative. All electricity consumers will be able to enjoy more choices and flexibility in their electricity purchase options.

To sustain the rollout of such initiatives to benefit consumers, the Energy Market Authority has renamed the "Retail Market System Related Charges" to "Market Development and Systems Charge" (MDSC). The current MDSC charge is 0.3771 cents/kWh. The MDSC forms part of the Market Support Service charges.
2.
How will the MDSC-funded initiatives benefit consumers?

The MDSC will support a range of market development initiatives, such as the Electricity Futures Market and the Open Electricity Market. These initiatives will benefit consumers by bringing about competitive pricing and more choices.

More competitive pricing

An example is the cost savings that Town Councils have enjoyed because of the emergence of independent electricity retailers (i.e. retailers not linked to generation companies) that the Electricity Futures Market has facilitated. In the Sep 2015 tender results (shown below) for the supply of electricity, 10 Town Councils were able to enjoy 22% discount off SP tariff – an additional 7.5% in savings compared to the most competitive quote from an existing generation company and retailer. This amounts to about $2.1 million savings a year, which will eventually benefit electricity consumers.

Tender in Sep 2015 for Supply of Electricity to East Coast, Holland-Bukit Panjang, Moulmein-Kallang, Nee Soon, Pasir Ris-Punggol, Potong Pasir, Sembawang, Tanjong Pagar, West Coast and Bishan-Toa Payoh Town Councils 
#  Tenderer  Discount % to SP Tariff  Discount (₵/kWh) 
1 Independent retailer A  22 4.5 (1.5 better than best offer from incumbent genco) 
2 Independent retailer B  18 3.7
3 Independent retailer C  17 3.5
4 Existing generation company and retailer D  14.5 3
5 Existing generation company and retailer E  14.1 2.9
6 Existing generation company and retailer F  13.01 2.6
7 Existing generation company and retailer G  8.5 1.7
8 Existing generation company and retailer H  5 1
9 Existing generation company and retailer I  4.95 1
10 Existing generation company and retailer J  3.2 0.7

The benefits of more competitive prices are not only confined to electricity consumers who buy from independent retailers. Due to the competition from the entry of more players, existing generation companies and retailers are also offering greater discounts to customers. This is reflected in their more attractive bids in a subsequent Town Council tender in Nov 2015 (shown below). Hence the Electricity Futures Market brings about benefits to consumers across the board, and not just to those who participate directly in the Electricity Futures Market.

Tender in Nov 2015 for Supply of Electricity to Ang Mo Kio, Chua Chu Kang, Jurong-Clementi, Marine Parade and Tampines Town Councils 
#  Tenderer  Discount % to SP Tariff  Change in discount compared to Sep’15 tender (%)  Discount (₵/kWh) 
1 Independent retailer C  27 10 5.5
2 Existing generation company and retailer F  26.01 13 5.3
3 Independent retailer A  20.88 -1.12 4.2
4 Existing generation company and retailer E  20.2 6.1 4.1
5 Existing generation company and retailer D  20.1 5.6 4.1
6 Existing generation company and retailer H  19 14 3.9
7 Independent retailer B  16.88 -1.12 3.4
8 Existing generation company and retailer I  15 10.05 3.1
9 Existing generation company and retailer G  8.5 0 1.7
10 Existing generation company and retailer J  5.5 2.3 1.1

More choices and flexibility

The Open Electricity Market is an initiative that allows electricity consumers to buy electricity from a retailer at a price plan that best suits their needs. This means consumers get to benefit from competitive pricing and innovative offers from the retailers.

Visit www.openelectricitymarket.sg to find out more about this initiative.

3.
How much is the MDSC?  
With effect from 1 April 2020, the MDSC is 0.3771 cents/kWh of electricity consumed. It is set based on the cost of supporting various market development initiatives, such as the Electricity Futures Market and the Open Electricity Market. The MDSC forms part of the Market Support Service charges.
4.
Do small consumers of electricity pay the same as large consumers of electricity?
As the MDSC is a usage-based charge, the amount paid by consumers will depend on their individual amount of electricity consumed.
5.
If I am buying electricity from SP Group at the regulated tariff, how will the MDSC be reflected in my electricity bill

The MDSC forms part of the existing Market Support Services fee that is set in the quarterly electricity tariff review.

6.
If I am buying electricity from a retailer, how will the MDSC be reflected in my electricity bill?
The MDSC forms part of the existing Market Support Services fee that SP Group bills to the retailers. In some cases, the MDSC could be absorbed by your electricity retailer depending on the terms and conditions of your contract. Please contact your retailer to find out more information.

 
If you are unable to find an answer to your query, please submit your Feedback to let us know how we can help you.
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