How To Save Money On Your Electricity Bill
A sign that you’re adulting is when you start paying electricity, water, and utility bills. These are all usually pretty standard and there’s not much choice — except when it comes to electricity. That’s because, in 2019, Singapore Power (SP) group stepped away from its monopoly on providing electricity. So now, the market is open to private electricity retailers to join and people can now pick their choice electricity retailer.
As the new players vied for their share of the market, customers were quickly hit with deals left and right. Rebates, cashback, discounts, and coupon codes were suddenly on the menu, encouraging customers to switch over from SP Group. There were massive discounts, even up to 40%! Even now, there are many promotions ongoing, including referral rewards and the occasional special sign-up offers.
These special deals are definitely great, but before signing on the dotted line, do take care to read the terms and conditions, as well as take note of any hidden costs so that you know exactly what you’re getting yourself into. It is always helpful to know what you’re paying for so read on to see how you can potentially save even more money in the long run.
1. The Paper Bill Fee
If you’ve been receiving your bills by mail all this while, perhaps it’s worth checking if you’ve been unknowingly paying over $2 a month for it. This $2 covers printing and postage to your home, so if you have easy access to E-statements and digital payments, and don’t mind reading digital bills, feel free to let your electricity retailer know about your preference. If you have elderly parents who aren’t as tech-savvy, you can also contact the company and ask them to channel the relevant bills to you digitally instead. Not only will this mini hack save paper, but also a couple of dollars a year!
2. Early Termination Charges
Once you switch electricity retailers, note that wanting to change again can result in you getting charged with an early termination fee. This is as electricity retailers seek to secure customer and brand loyalty. As such, the penalty for switching can understandably be rather heavy.
The termination rates differ from retailer to retailer and are calculated differently. Some determine the termination charges based on household type, while others calculate based on how long you have left on your contract. On average, if you live in a 4-room HDB flat, you can expect to pay about $100 to $200 for backing out of your contract early.
3. Advanced Meters Installation Fee
This $40 fee is for those who want to monitor their electricity usage closely. Instead of using the regular cumulative meter, which requires an actual person to go down and check the meter; many are switching to the more advanced meter. It’s completely in line with the trend of smart systems and tracking devices — only instead of tracking your heart rate or movement as a smartwatch would, the advanced meters measure your electricity consumption. With it, you can access the e-portals for live data.
The $40 upgrading fee is a one-time fee, which is said to be for the installation. To get this, you have to contact your electricity provider, who will then send a request to SP Group to perform the installation. The $40 you pay goes to them, as they provide the equipment and installation service.
4. Contract Auto-Renewal
This is not a fee per se, but it’s definitely something to look out for. After all, you may be enticed to choose a new electricity retailer due to really good discounts for new users. This can certainly help you to save money but the terms may change when you renew your contract. Do remember to clarify if the discount that you got for your initial contract will be carried forward or if there are any new discounts for renewed contracts. The law mandates that you must be notified 10 days before the contract actually renews, but it’s always better to stay on guard by reading the terms and conditions before actually signing the contract. And if you’re unsure of anything, feel free to contact your electricity retailer for clarification.
5. Transmission Loss Factor
In school, we learn that some power is always lost en route from the power station to our home — and the power loss is kept at a standard 1.031651. If you don’t exactly have an eye for numbers, not to worry as most electricity providers absorb that cost anyway, so you won’t have to pay anything extra for this lost percentage of power. However, it’s good to keep an eye out just in case. If you can’t remember this figure, just bear in mind that as a rule of thumb, you should pay for whatever is recorded on the meter at the end of each month and nothing more.
6. Carbon Tax
In the spirit of saving the environment, the government has in place the Carbon Pricing Act that subjects these power companies to a tax for every tonne of emissions. However, it also means that the cost is often passed down to us as consumers.
Not to fret, however, as it’s not a large amount. On average, it would cost under a dollar for a household living in a 4-room HDB flat.
7. Security Deposit
When you book a hotel room, a security deposit is usually charged to your card so that you can’t leave without actually paying. Similarly, when you sign with a new electricity retailer, don’t be surprised to see them collect a security deposit from you so that you can’t terminate your contract without paying your electricity bill. The actual amount of this upfront deposit differs between retailers, but most take into account your average electricity consumption, calculated based on the size of your home or previous bills.
That said, rest assured that retailers are not allowed to collect more than twice your average monthly bill. It’s a security deposit, so you will definitely get your money back in the event that you wish to terminate your contract — as long as you’ve made all your payments.
Conclusion
So before you hop on board with a new electricity retailer, it’s best to read through all the terms and conditions and take note of these fees; you can definitely save a ton in the long run just by being more aware. You can also expect some admin fees and service fees for using their services, so the actual cost may be higher than what you expected; fret not for these fees are not hidden so you can choose to clarify them with your electricity retailer if necessary. That said, there are plenty of great providers in the market at reasonable prices, so do your homework and you’ll be sure to save!
