EMA to make it easier for households to cancel auto-renewed electricity contracts with retailers

Among other changes, electricity retailers have to waive early termination fees for residential consumers who wish to end their contracts within 60 days of auto-renewal.SINGAPORE – From June 19, 2026, households will have more leeway to cancel electricity contracts with retailers, following complaints that such contracts were being automatically renewed without ample warning.The Energy Market Authority (EMA) said on Dec 19 that electricity retailers will be required to waive early termination fees for residential consumers who wish to end their contracts within the first 60 days of auto-renewal, instead of the current 30 days.The move comes after feedback from some consumers that they had to bear termination fees after missing notifications that their contracts would be automatically renewed.EMA said that retailers will also be required to notify consumers twice, instead of once, about any upcoming automatic renewal.“The first notification must be sent at least 10 days before contract expiry, and the second notification must be sent within three days before or on the day of the auto-renewal,” said the authority.These notifications must be sent via e-mail or postal mail, and through mobile communication channels like SMS, WhatsApp, or via the retailer’s mobile application.EMA said the new requirements were crafted after consultation with Singapore’s electricity retailers, which are allowed to offer automatically renewed contracts if their rates are capped at the prevailing regulated tariff for consumers buying electricity from SP Group.In 2024, about 45,000 residential electricity contracts were renewed automatically, accounting for 15 per cent of residential annual renewals.The new rules will not apply to consumers of SP Group.EMA chief executive Puah Kok Keong said: “These enhancements are aimed at ensuring residential consumers have clear and timely information before their electricity contracts are auto-renewed.“This will empower them to better assess their electricity purchase options and choose their preferred electricity plans.”The requirements will be reflected in the Code of Conduct for Retail Electricity Licensees.Since the nationwide roll-out of the open electricity market in 2018, households and small businesses have had the option of buying electricity from retailers.Those who did not make the switch continued to purchase electricity from SP Group at the regulated tariff rate.However, the market was gripped by turmoil in 2021, after the global energy crunch resulted in six electricity retailers exiting the market. Another two terminated contracts prematurely, leaving some customers scrambling to find other suppliers.In 2023, EMA introduced stricter rules to regulate the market, requiring retailers to meet new criteria that ensured strong governance and risk management.They are not allowed to unilaterally terminate a contract if there is no payment or contractual default by the consumer.To ensure fairness, those who impose early termination charges are required to compensate consumers by at least the same amount.Currently, there are 10 electricity retailers in Singapore.The Straits Times has contacted EMA for more details about the complaints from residential consumers.Source: The Straits Times © SPH Media Limited. Permission required for reproductionDiscover how to enjoy other premium articles here