SINGAPORE: Red Dot Power's decision to exit Singapore's electricity market will not cause any disruption to its customers' electricity supply, who will be transferred to SP Group, the Energy Market Authority (EMA) said on Monday (Jan 7).
Red Dot Power announced that it would stop providing retail electricity services with effect from last Friday, citing financial challenges.
In response to reporters queries, EMA said Red Dot Power customers will continue to receive electricity from the national power grid operated by the government-owned power supply company SP Group.
EMA said it is working with the company to "ensure a smooth transfer" of its customers to SP Group, as part of the "standard process" for retailers who are exiting the business.
According to EMA, Red Dot Power's customers were mostly commercial and industrial consumers. The company also had 120 household customers in Jurong, where it was part of the soft launch of the Open Electricity Market (OEM).
Red Dot Power, however, is not part of the nationwide launch of the OEM. Its exit therefore will have no impact on household consumers in the zonal rollout of the OEM, EMA said.
"After the transfer to SP Group, these customers can choose to switch to another retailer," EMA said, adding that they will not have to pay early termination fees.
Under SP Group, households as well as small businesses - those that consume a monthly average of 4MWh - will have to buy electricity at the regulated tariff, while larger businesses - those that consume a monthly average of at least 4MWh - will purchase at half-hourly wholesale electricity prices, EMA said.
"STRINGENT APPROACH" IN SELECTION OF RETAILERS: EMA
EMA said it adopts a "stringent approach" in the selection of retailers to participate in the OEM.
"In addition to fulfilling existing requirements for an electricity retailer licence, retailers who wish to serve households and small business consumers in the Open Electricity Market are required to fulfil additional requirements such as hedging their contracts to mitigate market volatility and enhance their business viability," EMA said.
"Even if their retailer exits the business, their electricity supply will not be disrupted and their security deposits will be protected by business insurance or banker’s guarantee."
By May, all 1.4 million electricity consumers in Singapore will have the option of choosing their preferred electricity price plans from as many as 12 providers.
The OEM was first launched in April last year in a pilot programme in Jurong. In November, it was expanded to households with postal codes beginning with 58 to 78, such as those in Choa Chu Kang, Bukit Batok and Yishun.
This was followed by the adjacent geographical zone with postal codes starting with 53 to 57, 79 to 80, 82 to 83 in January. In March, it will be expanded to postal codes starting with 34 to 52, and 81, and in May, to postal codes starting with 01 to 33.