On 1 February 2023, the Energy Market Authority (“EMA“) issued a public consultation (“Consultation“) seeking feedback on proposed enhancements to the regulatory regime for electricity retailers. The consultation exercise ended on 3 March 2023.
The proposed changes are aimed at making electricity retailers more resilient to market volatility and improving the stability of the retail market. In particular, the proposed changes seek to address two main gaps. First, the fact that electricity retailers may have large unhedged positions and are not adequately prepared for market volatilities. Second, the insufficient protection of consumers when electricity retailers exit the market, or if electricity retailers prematurely terminate contracts.
To address these gaps and strengthen the regulatory regime for electricity retailers, EMA is proposing four main measures:
(a) Requiring all electricity retailers to have a paid-up capital (PUC) or Tangible Net Worth (TNW) of at least S$1 million;
(b) Requiring electricity retailers to obtain EMA’s approval to appoint Key Appointment Holders (“KAHs“);
(c) Increasing the hedging requirements for all electricity retailers; and
(d) Strengthening consumer protection against premature termination of contracts.
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