Independent power producers (IPPs) should standardise and reduce their electricity selling prices to Tenaga Nasional apart from contributing to rural electrification - so that there could be a reduction in the overall tariffs for electricity charged to the consumers.
A situation where the electricity selling prices of the five present IPPs vary from Genting Sanyen Power Sdn. Bhd’s 11.8 sen per unit to YTL Power Generation Sdn. Bhd’s 15.5 sen per unit, when the cost of generating power by Tenaga Nasional itself is well below 10 sen per unit, is clearly unacceptable and intolerable.
The Prime Minister, Datuk Seri Dr. Mahathir Mohamed, yesterday welcomed the move by two of the five IPPs, Segari Energy Ventures Sdn. Bhd and Port Dickson Sdn. Bhd., to consider Tenaga Nasional’s suggestion that IPPs share Tenaga Nasional’s burden of rural electrification.
The other three IPPs, namely Genting Sanyen Power Sdn. Bhd., Powertek and YTL Power Generation Sdn. Bhd. should not only make a commitment to contribute to rural electrification, but all the five IPPs should agree in principle to the holding of talks with Tenaga Nasional to revise the Power Purchase Agreements (PPA) so as to standardise and reduce the electricity selling rates for those with high figures.
On the high cost of power supplied by IPPs compared to Tenaga Nasional, Mahathir said yesterday: “Initially, there was no response from the private sector to produce power and as such we had to accept those who came forward to generate electricity at a higher cost.”
It is a misconception that it was as a result of the Black September nation-wide blackout in 1992, that the Government was stampeded into the idea of privatising the generation of power by inviting the establishment of IPPs - and that in view of the urgency of the situation, the government was compelled to agree to whatever price demanded by the first IPPs.
In actual fact, the whole idea of privatising the generation of power and the setting up of IPPs had been raised before the Black September blackout in 1992, and various bids had been studied before the blackout- although a final decision on the matter had not been taken by the Cabinet So the question of the government being stampeded by the sudden discovery of a national energy crisis as a result of the 1992 Black September blackout was a completely baseless notion.
The real problem with YTL Generation Power Bhd getting such high selling prices at 15.5 sen per unit was because of the lack of accountability and transparency in the privatisation process.
In agreeing to YTL’s high selling costs, the authorities had overlooked the fact that it is not only unfair to Tenaga Nasional, but even more important, unfair to the over four million consumers in the country to have to bear the burden of such high costs. Justice to the consumers demand that the IPPs’ Power Purchase Agreements should be revised so as to standardise and reduce their electricity selling prices to Tenaga Nasional, leading to a general lowering of electricity tariffs for the Malaysian public.
(1/11/96)