EDIT: For people on wholesale plan, you can switch back to SP Regulated tariff price at SP online portal any time you like, with about 1 week notice. If current high prices makes you uncomfortable, switch back to SP Regulated for the time being. When prices stabilize, then switch back to Wholesale.
This is my plan of action as a wholesale customer.
If you do not have this mental flexibility, please keep to a fixed-price electricity plan. Otherwise, the high prices may do harm to you mentally and financially when energy prices go crazy. With crazy prices at the moment (Oct2021), now is obviously not the time to sign up for Wholesale plan.
I downloaded historical electricity prices for year 2021 to estimate how much I will be paying for my electricity bill in October. The average half-hourly rate from 1Oct2021 to 14Oct2021 (data not available yet for the rest of the month at the time of download) was $628/MWh. This is about 4 times more than the average half-hourly rate in September which was $156/MWh.
In case some people are influenced by my blog post last week into signing up for Wholesale plan, please be mentally prepared for price shocks. If this makes you uncomfortable, a fixed price plan is a better fit for you. If I have to choose a fixed-price plan today, I will prefer SP regulated tariff even though it is more expensive than the retailers because it does not come with a bond. I do not like the idea of being bonded to a fixed-price for 1-2 years at a time when prices are at very high levels.
For people who signed up for Wholesale plan, let's keep things in perspective. The average half-hourly wholesale rate in 2021 year-to-date, including the ultra-expensive October month so far, is $140/MWh based on USEP data. I was told to add another $60/MWh as an estimate to account for the miscellaneous charges charged by SP for wholesale account. $200/MWh is still cheaper than SP Group's regulated tariff rate which ranged from $207.6MWh to 241.1MWh this year. Customers who are on wholesale plan since beginning of 2021 will still enjoy some savings up to Oct14 compared to customers on regulated tariff pricing. Of course, this is no consolation if you sign up for Wholesale plan beginning in October.
Will wholesale prices continue their scary price momentum going forward? I do not know. The wholesale customer can switch to other plans any time he likes. There is no bond. For customers who have been with wholesale since beginning of the year, if they switch now, there is still chance to enjoy some cost savings compared to SP tariff rate.
If peace of mind is important, a fixed-price electricity scheme would be a good choice. I can see many Singaporeans opting for it. With electricity retailers folding one by one, the next best option for peace-of-mind seekers would be to either choose a financially strong electricity retailer, preferably backed by a parent who owns a power generation business, or SP Group.
Under the Singapore Electricity Market Rules, there is a price cap of S$4500/MWh which will not be exceeded regardless of market conditions. This is about 19 times the regulated tariff today. In the very unlikely worst-case scenario when prices are stuck limit-up at S$4500/MWh for the entire month, the typical 4-room HDB household will be seeing an estimated $1600 electricity bill for the month.
As a wholesale customer, I will seriously consider switching back to SP Regulated Tariff price if prices hit unprecedented high levels (no need to wait for $4500/MWh) and stay near the high levels persistently for several days. This way, one can avoid paying the $1600 bill worst-case scenario.
If one is comfortable with more risk bearing in mind the worst-case scenario, then Wholesale plan is for you. Some people compare Wholesale price hikes with investment disasters like Hyflux or profitable short volatility trade gone bad. Keep things in the right perspective. The risk is capped at around $1600 for a typical HDB 4-room household in the worst-case wholesale price hike scenario, if you hold on to the plan for the whole month. You can switch back to SP Regulated Tariff price anytime, with 1 week's notice.
