Saturday, October 23, 2021

October 2021 electricity bill for Singaporeans on Wholesale plan may be 4 times more than previous month. Keep things in perspective.

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.

 

Source

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.

10 comments:

  1. I found this article extremely helpful. The article was very interesting to read. I appreciate your hard work for writing this awesome article. I do satta work, so please visit my website.
    satta king
    sattaking

    ReplyDelete
  2. Such a very useful article. Very interesting to read this article. I would like to thank you for the efforts you had made for writing this awesome article. We work to motivate people Life Coach Training Program in noida

    ReplyDelete
  3. Such a very useful article. Very interesting to read this article. I would like to thank you for the efforts you had made for writing this awesome article. Do you want to know about Manage Transfer and FHA Live Transfers?

    ReplyDelete
  4. The aim of technical analysis is to interpret patterns seen in charts that will help you find the right time and price level to both enter and exit the market. As a forex trader, you’ll notice that the bid price is always higher than the ask price. When you are trading forex, you are always buying one currency and selling another at the same time.Moving across to online Forex trading or Currency trading is a natural progression for millions of traders around the world who are looking to start trading FX on MT4. Our introduction to Forex trading for beginners is a great way to lay a solid foundation, especially if you are new to the currency markets. As these currencies are not so frequently traded the market is less liquid and so the trading spread may be wider. It is important to have a strategy in place when trading any financial asset. This can be anything from a basic budget and schedule, to a complex Fibonacci strategy learned from the pros. Forex is a portmanteau of foreign and exchange and refers to the trading of international currencies – usually via derivatives. https://www.reviewengin.com/trade-juice-review/

    ReplyDelete
  5. If you’re looking to find more influencers, check out this list of people who are open to partnerships. Once you have a good list of leads, it’s time to send them an email. You can use a template , but make sure you customize each email and don’t sound robotic.
    Involving your site in schemes where your content is artificially promoted to the top of these services. Attempting to promote each new, small piece of content you create; go for big, interesting items. This generally describes the browser in most 3G-ready phones that are not smartphones. Smartphone - In this document, "mobile" or "mobile devices" refers to smartphones, such as devices running Android, iPhone, or Windows Phone. Mobile browsers are similar to desktop browsers in that they can render a broad set of the HTML5 specification, although their screen size is smaller and in almost all cases their default orientation is vertical. Use commonly supported filetypes; most browsers support JPEG, GIF, PNG, BMP and WebP image formats.
    You'll also see the term "E-Newsletter" bolded, indicating that Google knows there's a semantic connection between "email newsletter" and "E-Newsletter." Websites that are responsive to mobile allow blog pages to have just one URL instead of two — one for desktop and one for mobile, respectively. This helps your post's SEO because any inbound links that come back to your site won't be divided between the separate URLs.
    Our recommendations are geared toward smartphones, but we encourage multimedia and feature phones site owners to follow the same advice where they feel appropriate. Stuffing keywords into alt text or copying and pasting entire sentences. Using generic filenames like image1.jpg, pic.gif, 1.jpg when possible—if your site has thousands of images you might want to consider automating the naming of the images. Write anchor text that provides at least a basic idea of what the page linked to is about. If a shopping checkout page doesn't have a secure connection, users cannot trust the site. https://www.reviewengin.com/category/seo/

    ReplyDelete
  6. Wow! Such a very useful post! I appreciate your hard work for writing this awesome article. Thank you for sharing. The Satta King Game is played on a large scale in world. You can now play Disawar Satta King online & can also view the Satta King online result.

    ReplyDelete
  7. This comment has been removed by the author.

    ReplyDelete
  8. If you want to know best and honest anime reviews check Cryptoanime

    ReplyDelete

Picking the right Valentine. A much more difficult task than picking the right stocks

9 years ago, I wrote about choosing your Valentine from a value investing standpoint. What I wrote then still stands today, Beauty is over...