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  • Writer's pictureFree Malaysia Today

Disclose new electricity tariffs, urges PKR MP

By Minderjeet Kaur, Free Malaysia Today (29 June 2017) PETALING JAYA: A PKR politician has demanded that Tenaga Nasional Berhad (TNB) announce the expected new electricity tariffs by tomorrow. This follows the Energy Commission’s announcement that it will introduce a new system that will increase electricity tariffs. Kelana Jaya MP Wong Chen said only TNB and the commission had data from the power purchase agreements (PPA) on the cost of power generation from independent power producers (IPP). “Only by disclosing the amount can the public judge whether it is fair or not. TNB must disclose it to the public latest by tomorrow. “Due to the fixed PPA terms, TNB can only save costs from internal efficiencies and cost-cutting measures. It cannot expect savings from the IPP or a drop in global fuel costs,” he told FMT.

He was asked to comment on Sin Chew’s report which quoted Energy Commission chairman Abdul Razak Abdul Majid as stating that they had proposed to replace the current rebate structure with a surcharge system.

The proposal, Razak explained, came about after consideration of various factors, including the cost of coal and natural gas, and the currency exchange and inflation rates.

Sin Chew also reported that the government may stick with the rebate structure to avoid a politically sensitive rate hike ahead of the 14th general election.

To this, Wong Chen said it was not right to use electricity bills as a political tool for elections.

“That is just so wrong on so many levels that one can file a complaint to the Election Commission to investigate this as an attempt at vote buying.”

He said the Energy Commission must exercise transparency and not be subjected to undue political considerations.

Electricity tariffs in Peninsular Malaysia are fixed through the Incentive-Based Regulation (IBR) framework via a mechanism called the Imbalance Cost Pass Through (ICPT), implemented since January 2014. Wong Chen said the new ICPT rate could theoretically see electricity bills coming down or going up. Due to that, TNB must disclose the data on the reasons for a tariff hike.

The ICPT mechanism allows TNB to change electricity tariffs every six months. The timeline for the last revision expires on June 30.

The cost of piped gas is currently fixed at RM15.20 per MMBTU (million British Thermal Units) for the electricity tariff period from Jan 1, 2014 to Dec 31, 2017.

However, it is believed that the government has allowed Petronas, the national oil company, to raise the price of its piped natural gas to RM22.70/MMBTU. If true, this will add RM200 million to electricity generation cost in the second half of this year.

The savings from lower prices of liquefied natural gas (LNG) and electricity supplied under PPAs from independent power producers are balanced out by higher costs of piped gas.

This could influence the government to reduce the electricity tariff rebate, according to the Chinese-language daily.

The paper said operational costs of TNB are also likely to inflate based on proposals by the government to install smart meters and high voltage cables, and build new power stations in the next three years. These may further reduce the tariff rebates passed on to consumers.

The rebate of 1.52 sen/kWh for consumers in the peninsula came into force on Jan 1 last year. In 2015, the rebate was 2.25 sen/kWh.

On Dec 14 last year, Energy, Green Technology and Water Minister Maximus Ongkili said the government had agreed to maintain the electricity tariff rebate at 1.52 sen/kWh in the peninsula and 1.20 sen/kWh in Sabah and the Federal Territory of Labuan from Jan 1 to June 30, 2017.

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