With a little promotion to a local bank you can sign up for the new good deals here. - https://www.dbs.com.sg/personal/electricity-marketplace/default.page
Independent comparison: https://compare.openelectricitymarket.sg/#/home
Now down to the numbers and how I derived my findings through a basic data comparison.
The premise is that electricity tariffs are heavily dependent on crude oil prices, the former is charged by SP Group (Government) and the latter is market driven and denominated in USD
1. Downloaded data from the EMA (Energy Market Authority) that dates back till 2014
2. Obtained the prices of crude oil prices (USD) from macrotrends.net
3. Obtained the FX rates from XE.com (USD/SGD)
Doing some derivation, I converted the prices of crude oil prices to SGD and charted the market rates.
From the details, I discovered 3 key findings. Keeping in mind Warren Buffett's saying "Praise by name and criticize by category"
1. Since Jan 2014, the prices of electricity has remain within a band of 30% from peak to bottom. To some extent, I believe that electricity prices are controlled to ensure affordability for the common man.
2. While oil prices fell nearly 60% from peak to through, this did not translate into 60% savings. Was the authority making money here while making less money / subsidizing electricity usage when oil price was in the triple figures?
Unfortunately, without a good understanding of the entire value chain and what is the true costs of production. All these would merely be guesses.
WIIFM. As a Distinguished Toastmaster often said, this is his favorite channel - What is in it for me?
3. Applicable knowledge. Asking the right questions may get you the right answers. In this case, the most important question is the liberalization of the open electricity marketplace offering good value for consumers?
The answer is Yes.
Just taking Keppel as the key player.
- Fixed rate for 36 months is 0.1798 cents/KWH (incl GST). This is a 30% discount to the current market rate!
- If you like a bit more speculative flavor, you may consider Pacificlight or Sembcorp/Keppel which offers 21% and 20.5% off the regulated tariffs. (This effectively means you can benefit if the regulated prices fall)
Conclusion:
In my limited knowledge of the world, I understand that 2016 oil prices is a real abnormal situation. With oil barrel prices falling to as low as 50.62 SGD equivalent and electricity tariffs not even breaking 18 cents/KWH, I heavily doubt that the regulated prices would ever break that point. As such you are better off taking a fixed plan instead of sticking with SP Group.
What about flexi-plan? I estimated the breakeven point would need to be - regulated price at 0.22475 for a 20% discount to be 0.1798. How possible is this? Given the strong economy at the moment and rising oil prices, quite unlikely. But never say never.
Better to switch to to a private operator (fixed gets my vote at the moment).
Table 1: Historical data with estimates
Crude oil prices in SGD (left) | Electricity charged by SP Group (Right)
Aggregated chart
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