Electricity tariff up by average 15% from Jan 1

STAR, 2 December 2013

KUALA LUMPUR: The electricity tariff will be increased by an average of about 14.89% for Peninsular Malaysia, and by about 17% for Sabah and Labuan from next year, said Energy, Green Technology and Water Minister Datuk Dr Maximus Johnity Ongkili.

"The average electricity tariff in Peninsular Malaysia will be up 4.99 sen per kWh or 14.89% from the current average rate of 33.54 sen/kWh to 38.53 sen/kWh.

"For Sabah and Labuan, the average tariff will be up 5.0 sen per kWh or 16.9% from current average rate of 29.52 sen per kWh to 34.52 sen per kWh," he told reporters at a press conference in Parliament on Monday.

Rates in Sarawak will not be affected because the electricity supply in the state is operated by state-run company, Sarawak Energy.

The new rates will take effect from Jan 1, 2014, he added.

However, Dr Ongkili noted that 70.67% of consumers in Peninsular Malaysia and 62% of consumers in Sabah and Labuan will not be affected by the tariff hike.

"There will be no tariff increase imposed on the consumers who use electricity at a rate of, or lower than, 300kWh a month.

"This amounts to 4.56 million consumers in the peninsula and 260,000 consumers in Sabah and Labuan," he said. The group most likely to be affected are those whose electricity usage is between 301 to 400 kWh and 401 to 600 kWh.

The table on implications of the revised rate on domestic users.

The first group (about 720,000 consumers) will be billed between RM77.52 and RM128.60, an increase ranging from 12 cents to RM11.60 per month. (Not including 1.6% feed in tariff).

The second group (about 670,000 consumers) will be billed between RM129.12 to RM231.80, an increase of between RM11.71 to RM33 per month. (not including 1.6% feed in tariff).

Meanwhile in a statement to Bursa Malaysia, Tenaga Nasional said for domestic consumer (with a monthly consumption of up to 200kWh) the tariff would be maintained at a subsidised rate of 21.8 sen/kWh (i.e. no tariff increase).

This rate has not been reviewed during several tariff reviews since 1997.

Also consumers using 300kWh per month and below will not experience any tariff increase, the rate is maintained at 33.4 sen/kWh. Hence, there is no tariff increase to 70.7% of the household consumers (4.6 million consumers).

The domestic tariff band is reduced from current 8 bands to 5 bands for better understanding of tariff structure.

Commercial consumers will experience an average increase of 16.85% (ranging from 1.2% to about 18%). Industrial consumers will experience an average increase of 16.85% (ranging from 0.9% to about 17%). Special Industrial Tariff (“SIT”) consumers will experience an increase of about 19%.

This is in line with the Government’s effort to gradually reduce subsidies to industries. Even with this increase, SIT consumers will continue to enjoy discounted tariff rates, as compared to the rates for normal Industrial consumers.

The 10% discount on electricity bills currently enjoyed by Government schools, Government institutions of higher learning, places of worship and welfare homes registered with the Government and educational institutions partly-funded by the Government is maintained. The 10% discount will also be extended to the Universities teaching hospital under Ministry of Education (USM, UKM, UM).

Special Industrial Tariff (“SIT”) for water and sewerage operators will be given automatically and the electricity rebate by the Government for domestic consumers with a monthly bill of RM20 or lower will be maintained.

Higher electricity tariff next year?

The Edge Financial Daily, 9 July 2013

KUALA LUMPUR: Malaysians may have to pay more for electricity as Tenaga Nasional Bhd (TNB) is set to resume the fuel cost pass-through (FCPT) mechanism next year.

Deputy Energy, Green Technology and Water Minister Datuk Seri Mahdzir Khalid told Parliament yesterday that TNB will start implementing the mechanism next year to more efficiently regulate the electricity tariff for users.

The FCPT mechanism allows any changes in fuel cost to be channelled to users through tariff rates implemented by the government. Any additional fuel cost incurred due to higher fuel prices will be reflected by a higher electricity tariff and any reduction or savings will be returned to consumers.

FCPT has been adopted by utilities in many countries such as Singapore, Thailand, the Philippines, Japan, the US and Europe. It will be assessed every six months in tandem with the six-monthly natural gas price revision and taking into account the prevailing market coal and oil prices.

“With the implementation of FCPT, users will be given an incentive if power is used economically and a penalty would incur if power wastage is detected. “This programme will be implemented based on the country’s economic performance. Users’ cost of living will also be taken into account,” Mahdzir said in Parliament in reply to a question from Liang Teck Meng (BN-Simpang Renggam).

Mahdzir said the FCPT mechanism is a component in the incentive base regulation (IBR) programme. Although the mechanism was first introduced in mid-2011 and was supposed to be reviewed every six months to reflect movements in fuel prices, TNB has only revised its power tariff once.

The last adjustment in 2011 reflected the increase in gas price, which jumped from RM10.70 per million British thermal units (mmBTU) to RM13.70 per mmBTU, while the coal price is still assumed at US$85 (RM234) per tonne. The rates were revised to partly cover for the increase in electricity cost of supply since the last base tariff review in June 2006.

The last round of adjustments saw an average tariff increase of 7.12% following the 28% upward revision of the natural gas price. There was also an average 2% increase to partly cover the increase of electricity cost of supply since June 2006. Industrial and commercial consumers saw an average increase of 8.35%.

Domestic or residential consumers whose monthly consumption falls within the “lifeline band” of up to 200 kWhsaw no tariff increase as rates remained unchanged at a highly subsidised rate of 21.8 sen per kWh or approximately RM44 per month. The last tariff review of the lifeline band was done in 1997.

Consumers using 300kWh per month and below saw tariffs maintained at 33.4 sen per kWh. Those who use more than 300kWh per month will have to pay a rate of at least 40 sen per kWh.

According to TNB, about 75% of the household consumers, or 4.4 million people, use less than 300 kWh so they were not affected by the tariff increase.

Additionally, Mahdzir said consumers who use below 200kwh a month are subsidised, while payment from those with usage below RM20 is waived.

In April 2011, a 1% charge was imposed as feed-in-tariff for the renewal energy fund.

TNB is still paying RM13.70 per mmBTU for natural gas, which has been unchanged since June 2011. Gas remains the largest component of TNB’s fuel generation mix followed by coal and oil.

Recently, the power sector was badly hit by a gas shortage. TNB, in particular, saw an additional RM3.07 billion in fuel costs to burn distillates as an alternative fuel from Jan 1, 2010 to Oct 31, 2011.

Cheaper power with competitive bidding

STAR, 25 April 2012

A MORE competitive bidding process seems to be emerging in the power sector.

The first-generation independent power producers (IPPs) have been asked to put in their proposals for possible extension of their power purchase agreements (PPAs), which will mostly expire in 2016/17.

But approval is not going to be automatic; it will be based on the cheapest cost of electricity.

“If these IPPs can produce electricity that is cheaper than the new power plants, they are likely to be considered,'' said an industry player.

The first gauge of competitiveness, said analysts, would be against the cost of producing electricity from the Prai combined cycle gas turbine power plant, for which nine consortia and sole bidders have been shortlisted to take part in the tender process.

“If these IPPs can produce electricity that is cheaper than the Prai plant, the plan appears to be an initial uptake of 2,500 megawatts,'' said an analyst.

The first-generation IPPs YTL Power International Bhd; Segari Energy Ventures Sdn Bhd (a subsidiary of Malakoff); Port Dickson Power of the Sime Darby group; Powertek Bhd and Genting Sanyen Power Sdn Bhd have a combined capacity of 4,150MW.

1Malaysia Development Bhd (1MDB) had earlier announced it would acquire the power assets of Tanjong plc which would include Tanjong's wholly-owned unit, Powertek, the holding company of Pendekar Power.

These IPPs can submit bids for possible extension of up to 10 years, subject to some conditions, including reducing capacity payment for four years from now till the end of their current agreements.

“They are still preparing the bids,'' said the analyst. “It will probably take until September or October.''

Originally, the first-generation IPPs were supposed to negotiate for their PPA extensions on a one-on-one basis; however, Tenaga Nasional Bhd (TNB) was said to be firm in its stand that these IPPs had already made a lot of money.

Currently, these IPPs are also part of the nine consortia and sole bidders taking part in the tender process for the Prai plant.

Based on the cheapest cost of producing electricity, industry players have voiced their concerns that Tenaga Nasional Bhd (which owns the site for Prai power plant) and Petroliam Nasional Bhd (which controls the availability of gas) could be in a more advantageous position to lower costs.

The consortia comprise 1MDB, which has teamed up with South Korean conglomerate Hyundai Engineering & Construction; YTL Power with Marubeni Corp of Japan; CI Holdings Bhd and Teknologi Tenaga Perlis Consortium Sdn Bhd with Daelim Industrial Co Ltd of South Korea; Amcorp Power Sdn Bhd with Japanese group Mitsui & Co Ltd; and Malakoff and Petronas Power Sdn Bhd with Mitsubishi Corp of Japan.

Sole bidders are represented by local players Pendekar Power, Mastika Lagenda Sdn Bhd, an indirect 97.7%-owned subsidiary of Genting Bhdand the holding company of Genting Sanyen; TNB and Sime Darby Power Sdn Bhd.

Two million TNB consumers to pay 1% levy from Dec 1

STAR, 22 November 2011

PUTRAJAYA: An estimated two million (25%) of Tenaga Nasional Berhad (TNB) consumers in Peninsular Malaysia will pay a levy of 1% out of their total electricity bills starting Dec 1.

This will follow the launch of the Government's Feed-in Tariff (FiT) system for the development of renewable energy next month.

Energy, Green Technology and Water Minister Datuk Seri Peter Chin said Tuesday that electricity consumers will contribute 1% of their total electricity tariff bills issued by TNB to the Renewable Energy Fund if they use more than 300kWh of electricity per month.

"Nonetheless, 75% of TNB's customers who consume less than 300kWh per month will be exempted from contributing to this fund," Chin told a press conference here.

The FiT system is a funding mechanism under the Renewable Energy Act (REA) 2011 and Sustainable Energy Development Authority (SEDA) Act 2011 designed to encourage the development of renewable energy via cost-sharing among electricity consumers.

It was originally set to be launched in September but was postponed to wait for legal mechanisms under the REA to be in place.

RM454mil Q4 loss for TNB

STAR, 29 October 2011
KUALA LUMPUR: Tenaga Nasional Bhd (TNB) posted a net loss of RM453.9mil for the fourth quarter ended Aug 31 due to higher fuel costs, its second consecutive quarter of losses as widely expected by analysts.

The company reported a net profit of RM555.2mil in the same corresponding period a year ago. Loss per share was 8.33 sen compared with earnings per share of 10.22 sen.

Revenue, however, was 13% higher at RM9.12bil in the fourth quarter from RM8.07bil previously.
For the financial year ended Aug 31, 2011 (FY11), TNB's net profit plunged to RM499.5mil from RM3.2bil in FY10. Revenue for the year was higher at RM32.2bil versus RM30.3mil.

The utility giant's cash has also fallen due to the higher cost incurred. As at Aug 31, TNB's cash and cash equivalents stood at RM3.25bil from RM8.01bil a year ago.

In the second half, TNB reported a 31.4% increase in operating expenses mainly from independent power producer (IPP) energy payment and fuel costs due to higher consumption of oil and distillate and higher coal price and consumption. The IPP energy payment and fuel costs for the second half of FY11 increased by RM3.2bil, or 50.5%, from the first half.

It also made a foreign exchange translation loss of RM227mil for the whole of FY11, compared with a gain of RM632.6mil last year.

TNB president and chief executive officer Datuk Seri Che Khalib Mohamad Noh said the losses were mainly due to continued gas shortage resulting in an additional fuel cost of RM2.1bil from oil and distillate.

“TNB has to burn an additional 1.1 tonnes of coal amounting to RM400mil to supplement the lower gas volume,” he said at a briefing to announce its financial performance.

Che Khalib said its additional fuel cost did not factor in the extra coal it had to burn. “It we were to calculate it, the additional fuel cost would be about RM2.5bil.”

“We started FY11 with high coal prices but it was still manageable as the existing tariff structure allows TNB to partially recover the coal cost. However, in the second half of the financial year, TNB was hit by severe gas curtailment resulting in higher utilisation of distillate and oil.

“The cost of generation using these alternative fuels is five times more expensive compared to the cost of using gas,” he said.

To a question, he said TNB was currently in discussion with Petroliam Nasional Bhd (Petronas) to seek some compensation concerning its huge losses due to severe gas curtailment. However, he said no decision had been reached as talks were ongoing. “Some form of compensation is required,” said Che Khalib.

Concurrently, Che Khalib said TNB was also in discussing with its stakeholders, Petronas, the Governemnt and IPPs to resolve the shortfall in gas supply.

“We don't think the industry can go on longer (with the severe gas curtailment). We are having many discussion at the moment.

He was quoted as saying recently that, on average, TNB was getting about 900 million std cu ft per day (mmscfd), far from the usual rate of 1,250 mmscfd.

Che Khalib said it was unlikely for Petronas to fully restore its gas supply. “I think they have their own challenges as well,” he said.

He added that TNB's first quarter results may be “similar” to that of the fourth quarter and expected FY12 to be challenging. “Profitability is still too early for us.”

Separately, Che Khalib said the fuel cost pass-through mechanism had been formulated but there was no indication when it would be implemented.

He expected electricity demand to grow 4% next year. For FY11, electricity demand in the peninsula recorded a growth of 3.1%, driven by the commercial sector.

Energy Commission justifies early bidding for Tanjung Bin project

STAR, 22 October 2011

KUALA LUMPUR: The Energy Commission has clarified that the bidding process for the Tanjung Bin power station project was conducted five years before it begins operations in 2016 because construction of such a large-scale power plant would require at least five years on a brownfield site.

The project in Johor, which is to develop and operate the 1,000 MW coal-fired power plant, was awarded to Transpool Sdn Bhd, a subsidiary of Malakoff Corp Bhd, via a competitive restricted bidding process conducted by the commission from Nov 15, 2010 to April 15, 2011.

The project is needed to meet the projected demand in 2016 following the cancellation of the proposed submarine cable from the Bakun Hydroelectric Project.

“Greenfield development will require a longer period to undertake the Environmental Impact Assessment (EIA), detailed site identification and assessment.

“Based on the projected economic growth, failure to award such a project on time to achieve commercial operation in early 2016 will result in potential brownouts in the country,” the commission said in a statement yesterday.

It was responding to a recent statement by Petaling Jaya Utara MP Tony Pua.

The commission said the brownfield site option was chosen for the bidding process.

“Following an assessment by the Energy Commission, there are only two suitable brownfield sites that can meet the timeline requirement, and they were therefore short-listed for the bidding process.

“The evaluation of the bid proposals was conducted by a team consisting of officers of the Energy Commission as well as reputable financial, legal and technical international consultants appointed by the Energy Commission,” it said.

It said the tariff and concession period had already been determined through the competitive bidding process, adding that the final tariff submitted by the winning bidder and approved by the Government was very competitive compared with similar projects in the region. – Bernama

Policies Affecting Electricity Supply Industry Under Review

June 21, 2011

KUALA LUMPUR, June 21 (Bernama) -- The government is reviewing existing policies affecting the Malaysian electricity supply industry to be in line with globalisation.

Energy, Green Technology and Water Ministry Deputy Secretary-General (Energy) Badaruddin Mahyudin said the was due to the need for reform in the industry landscape so that it would grow along with the world.

"Over the years, reliable electricity is still an essential key element to nation building and economic development, especially to industries and other critical services that bring about increased income and benefits to the people.

"All these are some of the challenges in the landscape towards our aspiration to become a developed nation by the year 2020," he said when opening the two-day Power Plant Operations and Maintenance 2011 conference here today.

Over 60 participants from eight countries attended the conference whose aim was highlight the core power plant operation and maintenance issues.

Badaruddin said power plants in Peninsular Malaysia were currently among the best maintained and operated, and some independent power plants were operating at the unscheduled outage rate of below four per cent which was well within world class acceptance.

Nevertheless, improvements would still have to be introduced to ensure the power consumers got value for their money.

"Looking at the challenging future that we will be facing, we must be prepared for the eventual increase of energy prices to a more market-based mechanism.

"However, market-pricing will not be accepted by the masses if the power generation industry does not rise to the efficient level of expectation by the consumers," he said.

-- BERNAMA

Cabinet Committee To Study IPP Issue

IPOH, Jun 12 (Bernama) -- The cabinet has set up a committee to study the Independent Power Producer issue, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said on Sunday.

He stressed that the committee would study all aspects of power supply and not just the IPP issue.

Ahmad Husni is in the committee with Minister in the Prime Minister's Department Tan Sri Mohamed Yakcop and Minister of Energy, Green Technology and Water Datuk Seri Peter Chin Fah Kui.

"The committee will study various aspects (of power supply) and not just the IPP problem...among them (production) costs and (requirements for) the future because there are IPPs whose concession is due to end in 2014 and 2015," he told reporters here after opening the Rukun Tetangga beat base for Kampung Tengku Hussin.

He was commenting on a statement by Gua Musang Member of Parliament Tengku Razaleigh Hamzah who suggested that the government set up a royal commission of inquiry to IPP concessions.

IPPs are said to be reaping huge profits supplying power to Tenaga Nasional Berhad.

Ahmad Husni said the committee would also look at the question of subsidies and present a report to the cabinet as soon as possible although no deadline had been set.

"We have not been given any deadline for submitting the report, but what must be stressed here is that it will give priority to the interests of the people," he said.

Industries grapple with rising power bills

Written by Sharon Tan & Chua Sue-Ann

Edge Financial Daily, 01 June 2011 14:03

KUALA LUMPUR: With the upward adjustments of natural gas prices and electricity tariffs, heavy duty power users now have to grapple with additional cost pressures as analysts estimate the increase of an average power bill  to be between 6% and 10% for industrial and commercial users. The worst hit industries include those in the steel, oil and gas, food processing, cement and electronics and electrical sectors. In a note yesterday, Maybank IB Research opined that the tariff increase was fair and manageable for commercial and industrial customers given that Tenaga Nasional  Bhd’s (TNB) tariffs remain competitive compared with regional rates. Maybank IB Research noted that the tariff hike was more subdued this round compared to that in July 2008, where natural gas price jumped 111% to 135% and electricity tariffs rose 24%. It added that the gradual RM3 per mmbtu rise in natural gas every six months would allow commercial and industrial users to plan ahead. In announcing the tariff hike, the government explained  that 75% of consumers would be shielded from the direct brunt of the rise in rates. However, increasing margin pressures are expected to  force manufacturers to pass rising costs to end-users, which would further drive up the cost of goods. Apart from the direct impact on companies’ earnings, HwangDBS Vickers Research noted that the decision to increase electricity tariffs and gas prices may also translate into higher inflationary pressures as the multiplier effect works its way through the economic chain. The research house expected a reassessment of the timing of a potential snap general election, initially rumoured to be held this year, to allow time for the public to adjust to the higher cost of living. The Edge Financial Daily spoke to industry players in the affected sectors to find out the impact of the electricity and gas price increases and their strategies to grapple with the rising cost pressures. Rubber gloves According to CIMB Research,  higher energy costs are negative for the rubber glove sector given that electricity accounts for 2% to 4% of total costs while natural gas makes up between 3% and 9% of total operating costs. “Glovemakers that are already battling with higher input costs, a weaker US dollar and weak demand now have to squeeze out further operating efficiencies to offset the higher energy costs,” the research house said. As for Maybank IB Research, the average 7% hike in electricity tariffs and 20% rise in industrial gas price could result in a 1% to 2% increase in glovemakers’ total production costs. “In our view, an immediate average selling price adjustment in response to the higher energy costs is not likely as glovemakers also face mild over-capacity, a weaker US dollar and higher raw material (NBR) cost,” the research house said. Lim Wee Chai: We hope the government will provide sufficient advance notice should there be any future revision. Tai: Adjustments to the steelmaking process and grades of raw material used can also cushion the effects of higher tariffs. Yam: In the long term, property prices could trend higher as contractors and suppliers pass on additional costs. Maybank IB Research also said average selling prices would need to be revised upwards by 2% to 3% to fully neutralise the impact of higher power costs. It opined that glovemakers should still have the pricing power to fully pass on the higher costs  but producers’ competitiveness could be impacted in the longer term by rising energy and raw material costs. Company remarks Top Glove Bhd chairman Tan Sri Lim Wee Chai The overall impact of natural gas and electricity price increases is less than 1% of our total manufacturing costs. Top Glove started using biomass in 2005 to avoid depending entirely on natural gas. Currently, around 60% of the heat energy comes from natural gas as we have turned to biomass. Our new factories will no longer use natural gas. More research and development will be conducted on our production process to find ways to minimise energy costs. We will feel the short-term impact as we are unable to make any adjustment to the selling price some of the orders we have sold forward. This is because of the short short notice [less than two days] of the tariff increase. We hope the government will provide sufficient advance notice should there be any future price revision. We will have to pass on the additional costs to consumers just as we have done in the past. We will review the costing to factor in the current latex price and exchange rates in deciding how much to revise our prices. The price revision will be reflected in all new orders received from June 1 onwards. Steel The steel industry is expected to feel the impact of rising power prices given its intensive use of energy with electricity and gas contributing almost 10% of total production costs. Maybank IB Research anticipated that near-term margins for steel could be hit and local steelmakers would not be able to easily pass on additional costs as average selling prices are subject to international pricing. Company remarks Malaysia Steel Works (KL) Bhd CEO and managing director Datuk Seri Tai Hean Leng The degree of impact of the electricity tariff hike on steel players is largely dependent on three factors — size of the steel plant, process equipment and raw material used. The larger the steel plant, the higher the quantum of electricity cost. Steel plants with specialised equipment or with direct access to large quantities of alternative fuel such as oxygen can help reduce the impact of higher electricity tariffs. Adjustments to the steelmaking process and grades of raw material used can also cushion the effects of higher tariffs. In the case of Masteel, the new tariff will increase its electricity cost by approximately 10.5%. Masteel believes it will be able to partially reduce its electricity cost by making adjustments to the three factors mentioned and partially pass the remaining cost to its customers. Masteel’s strategy is to deploy the appropriate equipment to use alternative fuels to supplement the usage of electricity in steelmaking. Company remarks Ann Joo Resources Bhd group managing director Datuk Lim Hong Thye The natural gas price increase has an insignificant direct impact on Ann Joo as it is not a substantial cost component. As for our electric-arc-furnace operator, electricity is the second largest cost component, accounting for 8% to 10% of total costs for billet production. In anticipating future hikes in energy price, Ann Joo embarked on a blast furnace project in 2008. The blast furnace, used for iron and steel production via hot metal charging, ultimately reduces electricity and natural gas consumption. We are currently at the hot commissioning stage of the blast furnace project, the first blast furnace in Malaysia. We expect to reduce up to 40% of our electricity consumption per tonne of steel with the hot metal charging technology. In addition, the blast furnace off gas will be used to replace the natural gas that is currently used in the rolling mill operation. Real estate and housing The burgeoning real estate and property market is likely to feel the heat of higher costs, particularly if the cement and steel sectors begin to pass on rising costs to end-users. For the cement sector, Maybank IB Research said it may have to bear the brunt of the adjustments to gas and electricity prices at least for the next six months with cement prices rising about 7%  last month. Company remarks Real Estate and Housing Developers’ Association Malaysia (Rehda) president Datuk Seri Michael Yam In the short term, developers are obliged to maintain their pricing for ongoing projects which have had their prices locked in already. Unsold units of ongoing projects would still be sold according to the launch price. However in the long term, property prices could trend higher as contractors and suppliers pass on additional costs. The dilemma is often about whether to launch property projects prior to starting the tendering process or vice versa. Steel and cement prices are volatile and very often, tender prices are higher than the pre-contract estimates. Consumers can expect property prices to rise not more than 5%, although it is difficult to gauge as there are many factors to consider such as price increases in steel, cement and other raw and finished materials such as tiles. The property market will still be alright for this year. Next year when the price increases start to feed through, it will be interesting to see if there are salary adjustments. If salaries are adjusted accordingly, then maybe we will not feel the impact so much.

Ani Arope blames high power tariffs on ‘Economic Plundering Unit’

By Debra Chong

Malaysian Insider, June 03, 2011

 

KUALA LUMPUR, June 3 — Former Tenaga Nasional Berhad (TNB) chief executive Tan Sri Ani Arope is blaming the Economic Planning Unit (EPU) for rising electricity tariffs, saying the powerful agency forced the national power company to sign lopsided purchase deals nearly 20 years ago.

Ani said EPU, which he sarcastically dubbed "Economic Plundering Unit", forced Tenaga to buy electricity from an independent power producer (IPP), believed to be Genting Sanyen, at 14 sen per kilowatt hour (kWh) despite an existing offer of 12 sen/kWh then. Other IPPs then were charging 16 sen/kWh Genting Sanyen became the first IPP to transfer 15 million watts (MW) in electricity to TNB’s national grid on April 15 and is scheduled to complete a RM1.8 billion upgrade on its existing gas-fired plant with a capacity for 720 MW by June next year.

“You don’t need to go to a fanciful business school to figure out why we need a tariff hike — just revisit the terms given to some IPPs,” Ani, who helmed the utility company between 1990 and 1996, said in his last Facebook posting three days ago.

“With the take-or-pay clause and with the 40 per cent excess reserve that we have today, one only has to produce half of one’s capacity and be paid 80 per cent of the agreed capacity. Well done the then-EPU — Economic Plundering Unit,” he added, mocking the economic unit under the Prime Minister’s Department.
Ani called for a review of the original terms with the IPPs as the storm over energy price deals continues to build up.

DAP publicity chief Tony Pua cited today Ani’s 2006 interview with English daily, The Star, to increase pressure on the federal government to declassify the power purchase agreements (PPAs) inked between TNB and the IPPs.

Ani caused a stir 15 years ago when he chose to resign from his executive chairman post rather than sign the imbalanced deals, which saw the first generation of IPPs created, such as YTL Power Services, Powertek and Malakoff during the Mahathir administration.

“TNB is the whipping boy. TNB has no control of the price it has to pay to the IPPs. Get to the source of the problem,” said the Penang-born now in his early 80s.

The Najib administration has been savaged for allegedly protecting the interests of IPPs rather than the public.
Putrajaya announced the 7.12 per cent hike in electricity rates in an effort to trim a subsidy bill that would otherwise double to RM21 billion this year and promised the hike will not affect 75 per cent of domestic consumers.

But power prices will now rise by as much as 2.3 sen per kWh in areas taking TNB’s electricity supply, a potential source of public anger just ahead of a general election expected within the year.
The Star daily reported today the government was close to inking a deal for a 1000 MW coal-fired plant in Manjung which will charge 25 sen/kWh.

Contract to Malakoff to build 1,000MW power plant expected soon

STAR, 3 June 2011

PETALING JAYA: Malakoff Corp Bhd, owned by MMC Corp Bhd, is expected to be awarded a contract to build a 1,000MW coal-fired power plant soon, said sources.

According to sources, the plant will have a 15-year concession to sell the power at a rate of 25 sen per kwh to Tenaga Nasional Bhd (TNB).

“MMC has yet to receive the award letter but the decision has been made already, based on tender submissions,” said one source.

In August, the Energy Commission had awarded a concession to TNB to develop a 1,000MW coal-fired power plant on its existing power plant site in Manjung Perak.

Malakoff’s Tanjung Bin power plant in Johor

 

At that time, the industry was abuzz with the possibility of a new tender for another coal-fired power plant of the same capacity being called up soon.

Certain quarters believed that Malakoff, the owner of the 2,100MW Tanjung Bin power plant in Johor, stood a good chance of winning the tender.

A Bernama report earlier this year, quoting Energy Commission chairman Tan Sri Dr Ahmad Tajuddin Ali, said the Government was likely to decide on the concessionaire for the second 1,000MW plant this month.
The commission had issued a request for proposals from MMC Corp's unit, Malakoff and Jimah Energy Ventures Sdn Bhd, with regards to this, the report said, adding that the plant could either be at Tanjung Bin in Johor or Jimah in Negri Sembilan.

The urgency to ramp up electricity-generation capacity in Peninsular Malaysia is to avert a potential power shortage by 2015 and make up for the “lost” supply of 1,600MW from the Bakun Dam in Sarawak, which was initially supposed to be supplied to the peninsula.

According to the commission, the peninsula could face a power shortage by 2015 based on the Government's targeted growth rate of 6% per year for the next five years for the country's economy.

Electricity demand in the peninsula has already been growing between 5% and 8% every year.
Industry experts said that based on the demand growth trend, the current electricity reserve margin of about 42% could be halved if there were no new plant-ups soon.

One of the major concerns in this regard is to make sure that the electricity reserves margin does not fall below the 20%-mark by 2015.

Electricity consumption per capita in Malaysia now stands at about 3,412 kwh per annum, significantly higher than most developing countries, but still below the average in developed countries.

It is projected to more than double to 7,571 kwh per person in 2030, higher than that of the Asia Pacific Economic Cooperation region's average of 6,833 kwh per person.

Power Tariffs Raised, 75 Per Cent Of Rakyat Not Affected

May 30, 2011 18:06 PM

PUTRAJAYA, May 30 (Bernama) -- As part of its ongoing subsidy rationalisation exercise, the government Monday announced that average electricity tariffs will be raised by 2.23 sen kilowatt per hour (kWh) or 7.12 per cent to 33.54 sen kWh, from 31.31 sen kWh, effective Wednesday, June 1.

However, the move will not affect about 75 per cent of the population who mainly consume less than 300 kWh per month.

The announcement was made at a joint press conference by Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop and Minister of Energy, Green Technology and Water Datuk Seri Peter Chin Fah Kui.

They said the 7.12 per cent hike was due to the increase in natural gas price to the power sector.

As a result, Tenaga Nasional's average tariff had to be reviewed upwards by two per cent or 0.63 sen kWh.

"The review will enable the utility company to increase its investment in better electricity infrastructure including supply and distribution," he said, adding that it would invest about RM4.5 billion, annually.

Chin also said in line with the government's effort to rationalise energy prices in accordance with global market mechanism, the government has agreed to use the fuel-cost-pass formula to determine future tariff prices.

To encourage the use of electricity generated from renewable energy, the government has also decided to impose an additional one per cent feed-in-tariff portion which will be channeled, to the RE Fund, to promote the purchase.

-- BERNAMA

Water and electricity for all in 2 years: DPM

STAR, 23 December 2010

LIMBANG: The Federal Government has set itself a target of two years to resolve the electricity and water supply problems facing the people.

Deputy Chief Minister Tan Sri Muhyiddin Yassin said these two basic amenities must be supplied to all Malaysians regardless of where they were living.

“The extension of electricity and water supply has been included in the National Key Result Areas (NKRAs) and we have set a target of two years to provide the people with these amenities,” he said when addressing people from all races during a dinner here on Wednesday night.

Confident of achieving the target, he said the Government had already set things rolling.
“We are no longer talking about plans. We are not at the planning stage any more. We are already implementing programmes on the ground to get these accomplished.

“Provision of these basic amenities to all people, especially outside the cities and towns, is vital. It is as important as the construction of road-links for all rural regions, which is also under the NKRAs,’’ he added.
On Opposition propaganda, Muhyiddin urged the people not to believe their accusations that the Federal Government had given too much attention to only certain places, like Kuala Lumpur.

While he acknowledged that the Government had to spend huge sums to tackle public problems in huge cities like Kuala Lumpur, it had not neglected the rural people.

“In Kuala Lumpur, we have to spend billions to build facilities like the Mass Rapid Transit (MRT) just to resolve the massive traffic jams daily.

“However, we are also at the same time, focusing on overcoming the very basic problems like absence of electricity and water in rural settlements such as in Sarawak,’’ he added.

Muhyiddin said the Government’s plan to create a high-income society was aimed at the city and town people alone.

“We want to raise the per capita income to US$15,000 (RM46,700) by 2020, from the present US$8,000 (RM24,900). This target is achievable even for the rural people if the Government’s transformation programmes can succeed,’’ he said.

He said the Government had rolled out 131 big projects nationwide to transform the economic, industrial and services sectors and a big portion of these are for rural areas.