Round Up Speech for the Second Reading of the Electricity (Amendment) Bill

ROUND-UP SPEECH BY DR TAN WU MENG, SENIOR PARLIAMENTARY SECRETARY FOR TRADE AND INDUSTRY AND FOREIGN AFFAIRS, AT THE SECOND READING OF THE ELECTRICITY (AMENDMENT) BILL ON 1 OCTOBER 2018

1.         Mr Speaker, I thank the Member for the queries and support for the Bill. Let me first address Ms Joan Pereira’s suggestions regarding our communication and contingency plans during a power outage. We had discussed this earlier during the Round Up Speech for the Gas Amendment Bill, and we very much agree that we can continue working on ways to improve, by learning from practices around the world.

2.         Let me also address the Member’s question on microgrids and cybersecurity.

3.         As the Member rightly noted, microgrids can operate independently during an emergency. We are also studying various aspects of microgrids, because these can allow for easier integration of various energy technologies.  For example, the upcoming microgrid at the Singapore Institute of Technology’s campus in Punggol will be the first urban microgrid in Singapore that will integrate various types of energy technologies, including renewable sources and energy storage.  There’s also an ongoing microgrid test-bed at Pulau Ubin studies the real-world impact of renewable energy on grid system stability and reliability.  These test-beds will provide useful insights to help EMA in planning for future grid designs as well as the main grid to ensure resiliency, and we will continue to explore where such microgrids would be suitable for deployment in Singapore.

4.         As for cybersecurity threats to our electricity transmission system. I would like to assure the Member that the Electricity Act already gives EMA the mandate to address such threats, and EMA takes such threats seriously. For example, under the Electricity Act, EMA is able to go after persons who hinder or prevent the grid from being used or operated in the manner in which it is intended for. The amendments to the Electricity Act make clear that this includes through wireless means, in addition to physical means. Furthermore, the Computer Misuse and Cybersecurity Act also includes offences relating to cyber-attacks or hacking, such as the unauthorised access to computers or computer systems, and unauthorised use or interception of computer services.

5.         We have also formulated a cybersecurity governance framework for the energy industry in close partnership with the Cyber Security Agency (CSA). The energy industry’s Critical Information Infrastructures (CIIs) also adopt best practices in security management. For example, the computer systems in CIIs are isolated from the Internet.  In addition, there are regular industry-wide exercises and sharing sessions to ensure the sector’s resilience and readiness in emergency responses to cyber-attacks. We will continue to work with CSA and the industry, to ensure the robustness and relevance of our cybersecurity governance framework.

6.         I will now address the Member’s queries regarding contestability and the Open Electricity Market, or OEM for short.

7.         The member asked about how the regulated tariff is determined, and why retailers can charge less for their electricity packages. The regulated tariff, charged by SP Group and approved by EMA, is set based on a fixed formula that reflects the long-term costs to produce and deliver electricity in Singapore. SP Group is required to supply electricity to all consumers, and has to bear the risk of an uncertain consumer base as it does not tie down its customers to any contract or impose early termination charges.

8.         On the other hand, retailers are able to set their prices based on their own business strategies, to adapt to shorter-term factors such as prevailing market conditions and level of competition.

9.         We do share the Member’s concern over ensuring that all households, including our senior citizens, and small businesses are able to make an informed choice on their electricity supplier.

10.      To this end, EMA uses regulatory measures, as well as community outreach.

11.      As the regulator, EMA requires retailers to present and seek households’ acknowledgement of the Consumer Advisory and Fact Sheet on the key contractual terms such as payment terms, contract duration, security deposit and early termination charges. EMA also requires retailers to safeguard all security deposits collected from households.

12.      For community outreach, EMA will also embark on education and awareness campaigns to inform consumers about the OEM and what to look out for when switching to a retailer.  EMA is also working closely with various Grassroots Organisations to ensure that senior citizens are kept informed as well, especially seniors who are not literate.  This is one of the reasons why the nationwide rollout of the OEM from 1 November 2018 will be done in zones, so that EMA and retailers can focus their resources to help consumers better understand their options before making a decision. 

13.      Mr Speaker, I would like to emphasise that consumers who do not wish to switch to a retailer can remain with SP Group and continue buying electricity at the regulated tariff. As a consumer, you do not need to switch, there is no deadline to switch, and you can take time to consider your options and whether to switch. The proposed amendment to the Electricity Act today also clarifies the right of small contestable consumers to revert to buying electricity at the regulated tariff, if they cannot, or do not, wish to purchase electricity from a retailer.  This amendment covers all households.

14.      Mr Speaker, I would like to thank the Member who had spoken on this Bill, and the valuable comments provided.  In summary, this Bill will ensure that the Electricity Act continues to remain effective and relevant in ensuring the safe and reliable supply of electricity, amidst the changing energy landscape.

15.      Sir, I beg to move.