It’s not exactly the best time to be an electricity retailer.
In the past week alone, two electricity retailers have exited the electric market due to the volatility of the electricity market.
Now, another retailer has had to resort to cost-cutting measures due to soaring energy prices.
Electricity Retailer Union Power Drops 850 Customers But Continue With Other Customers
Union Power has dropped 850 customers due to “sustained hikes” in wholesale energy prices.
In a statement yesterday, the company explained that Singapore’s electricity market has been significantly impacted by the recent volatility of the global energy market because power generation here chiefly relies on natural gas.
“The sustained spikes of the Uniform Singapore Energy Price (USEP) are due to a combination of factors and cannot be fully mitigated through hedging or participation in the electricity futures market,” it said.
Usep reflects the price at which all electricity retailers buy from the wholesale market, and indicates the energy prices in Singapore every 30 minutes.
It maintained that it won’t be exiting the electricity market, however, and that most of its residential customers will not be affected.
Why Close Some Accounts & Not Others?
All 850 electricity accounts closed by Union Power belong to commercial customers, while the rest are residential customers – the majority of its clientele.
The electricity retailer explained that it segregated its customers based on their levels of electricity use.
Base-load customers usually use a minimum and continuous amount of electricity over a 24-hour period.
On the other hand, peak-load customers’ electricity use is less predictable, meaning it costs more to maintain their accounts.
This is why, it said, it is ceasing the accounts of peak-load customers for the most part. Some of these customers are in arrears (debt to Union Power), it said.
“Where applicable and not in arrears, these customers will receive payment from Union Power,” it added.
Customers who are affected by the reorganisation can appoint a new retailer or have their accounts transferred to SP Power, the company said.
“Union Power will make the necessary arrangements to ensure minimal disruption of electricity supply,” the company said.
Following the closures, Union Power now has around 20,000 accounts.
2 Electricity Retailers Closed in 3 Days
Last week, two electricity retailers closed in just three days.
Ohm Energy cited a “volatile electricity market” while iSwitch Energy said it ceased operations due to the “current electricity market conditions.”
Customers under the two former retailers will have their accounts transferred to SP Group.
Both Ohm Energy and iSwitch Energy are working with the Energy Market Authority (EMA) to ensure a smooth transfer.
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Featured Image: Union Power