There are two key components of the electricity tariff: fuel cost and non-fuel cost.

The fuel cost component for each quarter is calculated using the average of daily natural gas prices in the first two-and-a-half month period in the preceding quarter.

The non-fuel cost component reflects the cost of generating and delivering electricity to homes. It comprises mainly the grid charge, and the capital and operating costs of generation companies.

The fuel cost component of the electricity tariff for each quarter is calculated based on the average of daily natural gas prices in the first two-and-a-half month period in the preceding quarter.

Consequently, there is a time lag in the gas price reflected in the electricity tariff because changes in gas prices in the current quarter will only be taken into account in the next quarter's tariff. This means that any increase or decrease in gas prices in the current quarter will be reflected in next quarter's tariff.

In Singapore, the price of electricity is not subsidised. This is to price energy correctly so that consumers are incentivised to use electricity efficiently and avoid wasteful consumption.

The Government recognises that there are households which may face difficulties coping with the rising cost of utilities, and is ready to help them. In this regard, the Government assists HDB households with their utilities bills payment through the Utilities-Save (U-Save) scheme, with higher amounts of rebates going to lower-income households.

Electricity meters are read bi-monthly. On those months when the meters are not read, your electricity usage will be estimated based on your past consumption. Any over or under estimation of the bill will be adjusted in subsequent bills when the meter reading is taken.

If your meter is located inside your premises, SP Services' meter readers will need to access your premises to read the meter.

If meter readers are unable to access your premises to take the meter readings, you will be given a "Door Lock Card" providing details to guide you in submitting your meter readings.

If you wish to submit your meter readings, you can do so via the following methods:

i. SP Services website (http://www.spservices.com.sg)
ii. SP Services' smartphone app
iii. Interactive Voice Response system (1800-2222-333)
iv. SMS MRSUBM to "98374797".

The Interactive Voice Response system also allows you to arrange for an appointment to read your meters to avoid being billed on estimates for a prolonged period.

Your utilities usage will be an estimation if SP Services did not receive your meter readings. Until SP Services' meter readers can record your meter readings, you will be billed based on your estimated usage.

You may also refer to the FAQs on SP Services' website if you wish to learn more about meter readings and bill estimation.

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 progressive opening up of the electricity retail market, which will culminate in Full Retail Competition in the second half of 2018. All electricity consumers will be able to enjoy choosing from a wide range of electricity retail packages at competitive prices to meet their energy needs.      

To sustain the rollout of such initiatives to benefit consumers, the Energy Market Authority will be renaming the current "Retail Market System Related Charges" to "Market Development and Systems Charge" (MDSC) starting 1 July 2016. The charge will be 0.40236 cents/kWh, 0.2 cents/kWh – or about 1% of the average retail price – higher than the current quantum of 0.20236 cents/kWh. The MDSC forms part of the Market Support Service charges.

The MDSC will support a range of market development initiatives, such as developing the Electricity Futures Market and implementing Full Retail Competition in the second half of 2018. The initiatives will benefit consumers by bringing about more competitive prices and retail 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

Greater retail choices

Since April 2015, five independent retailers with new business models have entered the electricity market offering consumers greater retail choices:

• Best Electricity Supply provides competitive electricity retail packages customised to meet the requirements of Small and Medium Enterprises and other consumers, including flexible commercial terms.
• I Switch features competitive electricity retail packages to consumers, and provides hedging options to electricity retailers and generation companies to help them manage their price risk.
• Red Dot Power is a one-stop service provider for the supply of electricity to consumers as well as offering consumers demand side management services to help them better manage their electricity usage.
• Sunseap provides solar leasing, where it takes care of the installation and maintenance costs of solar panels. Building owners then pay Sunseap for  electricity generated by the solar system.
• Sun Electric offers solar-generated electricity to consumers without rooftop space to install solar panels. By hedging on the Electricity Futures Market, Sun Electric has been able to pass on cost savings directly to consumers.

Power generation-linked retailers have been innovating to create value for customers as well. Among them is Tuas Power Supply, which provides electricity packages that promote energy conservation (through ways such as minimising energy wastage with advanced lighting solutions) and enhancing energy efficiency for its customers.

In another example, Apple awarded an electricity retail contract (33 MWp) to Sunseap for the premises of Apple to be fully powered by solar energy. Sunseap's business model entails procuring solar energy for Apple from the solar panels installed in other consumers’ premises, while using the Electricity Futures Market to hedge its pricing risk. This is possible because independent retailers can now leverage on the Electricity Futures Market to hedge any pricing risks for their consumers.

The MDSC revision to support market development initiatives is 0.2 cent/kWh of electricity consumed. This is kept small (about 1% of the electricity bill) to minimise the cost impact to consumers. For instance, a typical 4-room HDB flat will pay about 60 cents more for its monthly electricity bill.

The MDSC was set based on the cost of supporting various market development initiatives, such as developing the Electricity Futures Market and implementing Full Retail Competition in the second half of 2018. The MDSC forms part of the Market Support Service charges.

 

The “Retail Market System Related Charges”, which is a current charge under the Market Support Service charges, will be renamed to "Market Development and Systems Charge" (MDSC), and revised from 0.20236 cents/kWh to 0.40236 cents/kWh from July 2016, resulting in an increase of 0.2 cents/kWh – or about 1% of the average retail price. This is to better reflect the nature and purpose of the charge.

In some cases, the MDSC could be absorbed by your electricity retailer depending on the provisions in your retail contract. You can also explore other mutually agreeable arrangements with your retailer.

 

The average monthly electricity and gas consumption for the various household types can be found on SP Services' website. Under Homes (For residential use), please select "View National Average Household Usage".

The MDSC will become part of the existing Market Support Services fee that is set in the quarterly electricity tariff review. The MDSC will be incorporated into the electricity tariff review from Q3 2016. The estimated 1% increase in the electricity bill for consumers is kept low to minimise the cost impact on them. For instance, a typical 4-room HDB flat will pay about 60 cents more for its monthly electricity bill.