SINGAPORE, Oct 18 — Electricity Retailer Union Power will be ceasing retail accounts with 850 customers after what it called “sustained hikes” in wholesale electricity prices here. In the past week, two other electric retailers here announced they would be exiting the market.
A global energy crunch has caused record highs in the price of natural gas, on which Singapore’s electricity generation is largely dependent.
Announcing the move in a statement on Monday (Oct 18), the firm, which is licensed by industry regulator Energy Market Authority (EMA), said that it would not be exiting the electricity retail market in Singapore. It still has about 20,000 accounts.
Union Power said it is ceasing mostly peak usage accounts such as commercial customers, some of whom are in arrears. The load usage of these accounts is “less predictable and hence, more expensive”, it added.
“Where applicable and not in arrears, these customers will receive payment from Union Power,” it said.
“The recent volatility in the global energy market has impacted the national electricity market of Singapore very significantly as local power generation relies largely on natural gas,” the statement read.
“The sustained spikes of the Uniform Singapore Energy Price are due to a combination of factors and cannot be fully mitigated through hedging or participation in the electricity futures market.”
Union Power added in its statement that customers affected by the reorganisation can appoint a new retailer or have their accounts transferred to utilities agency SP Group, or do so “by default to SP’s prevailing terms and conditions”.
Alternatively, they can appoint a new licensed retailer by noon Thursday, and the transfers will take place by the close of business on Friday, read the statement.
“Union Power will make the necessary arrangements to ensure minimal disruption of electricity supply.”
Most non-peak accounts such as residential households, will not be affected, Union Power added. These accounts “usually use a minimum and continuous amount of electricity on a typical 24-hour period with little change to their requirements”.
The statement comes days after two electricity providers here — Ohm and iSwitch — abruptly announced that they would be exiting the electricity market here due to market conditions.
EMA said on Saturday following the announcements by Ohm and iSwitch that it is working closely with retailers wishing to continue operations to hedge against future volatility.
Union Power said that it has updated EMA on its decision.
“Union Power has embarked on reorganisation with sadness as it values customer loyalty and relationships,” said executive director of Union Power Ellen Teo.
“This is a difficult but necessary step to ensure the financial viability of Union Power.”
When TODAY sought comment from EMA on Union Power’s decision, the authority referred to its statement on Saturday. — TODAY
