Choose your own power provider

Goh Chin Lian, Straits Times 22 Nov 09;

Clementi West resident Esther Ng is buying electricity in a new way that matches her preferences and lifestyle.

In a trial by the Energy Market Authority (EMA) that could pave the way for more competition ahead, she can choose from three simulated retailers.

They offer different rates for peak and off-peak periods.

Currently, sole provider SP Services charges a flat 21.69 cents per kilowatt hour.

Another change: she pays first, by buying 'electricity credits' online. She can also buy credits from a vending machine in a 7-Eleven store.

The Sunday Times understands a prepaid system could save on hiring staff to read meters in homes and maintaining a system of billing numerous small consumers.

In Ms Ng's three-room flat, a blue palm-sized gadget tallies the amount of electricity used in dollar terms, and the credits left.

When the credits run low, the gadget sounds an alarm. If the credits run out, the power supply will be cut.

Ms Ng, 28, a construction consultant, is one of more than 400 volunteers from West Coast and Marine Parade taking part in a six-month experiment.

EMA chief executive Lawrence Wong said on Thursday that these households used 2 per cent less power. They shifted 10 per cent of usage from peak to off-peak periods.

He also announced plans to expand the experiment as part of a new multi-million-dollar project to test technologies for a smart electricity network. The project is scheduled for the next two to three years.

In the trial, SP Services simulated three retailers.

Retailer A charged 25.23 cents per kilowatt hour for the peak period (7am to 7pm) and 21.03 cents for off-peak (7pm to 7am).

Retailer B charged a lower 21.17 cents in the day, and 25.40 cents at night.

Retailer C had a flat rate of 21.69 cents, plus a 7 per cent goods and services tax.

Ms Ng, who opted for B, managed to cut her monthly bill of $65 to below $60.

The need to pay first initially made residents like Mr Raymond Cheah, 36, watch his usage. But the IT consultant said he relaxed after a week.

He uses Giro to automatically top up his account with $100 worth of credits whenever it is depleted. He lives in an executive flat in Clementi West.

The impact of a prepaid system on the poor worried retiree Ho Ah Mui, 68, who suggested giving them a grace period if they cannot pay first.

'They shouldn't cut the supply straight away, but give them electricity at night,' said Mr Ho, who lives in a terrace house in Telok Kurau.

An obstacle to fully freeing up the electricity market for households is the high cost of servicing small accounts.

Smart meters that furnish retailers and consumers with detailed information on power usage - like the ones used for the trial - could solve the problem. But these meters cost more than 10 times that of existing ones.

Meanwhile, to inject competition, the EMA is inviting power firms to bid to supply 3 per cent of electricity demand from homes and small businesses. The figure will be carved out from the 55 per cent of demand that is price controlled.

The companies already vie to supply the remaining 45 per cent to large customers like factories.

The successful bidder will start supplying power from next April, for nine months. The price for homes and small firms will be a weighted average of the tender price and current flat rate.