Tenaga Nasional Bhd. Executive Chairman, Datuk Dr. Ahmad Tajuddin said yesterday that Tenaga Nasional is hopeful that it will be able to introduce a new power tariff formula next year, which in turn will improve its group earnings.
This is the clearest admission in public to date that Tenaga Nasional is working on the government to get approval for a new increase in electricity tariffs, which will be a further burden on the people and increase the inflationary pressures in the Malaysian economy.
It is most unfair for Tenaga Nasional to demand tariff revision to make consumers pay for the high costs of electricity charged by Independent Power Producers (IPPs).
Tenaga Nasional has said that the new tariff structure approved by the government effective from March 1, 1996 was insufficient to absorb the IPP payments by Tenaga Nasional, which amounted to RM2.3 billion in 1996.
The fair and reasonable solution to this impasse is for the government to order a review of the Power Purchase Agreements (PPAs), some of which charge exorbitant rates which are clearly against the public interest.
In his budget speech, the Finance Minister, Datuk Seri Anwar Ibrahim had asked IPPs to do two things: firstly, to be fair to consumers by standardising their rates, which range from 11.8 sen per unit for Genting Sanyen Power Sdn. Bhd. to 15.5 sen per unit for YTL Power Generation Sdn. Bhd; and secondly, to be fair to Tenaga Nasional by performing their social obligation to contribute to rural electrification.
The IPPs are prepared to contribute to rural electrification, as it would involve a paltry few million ringgit, especially in view of the high electrification rate in Peninsular Malaysia, but do not want to standardise their electricity rates as this is the source of their enormous profits.
If the average cost of IPP’s rates of electricity sold to Tenaga Nasional are reduced by one sen per unit, based on the RM2.3 billion which Tenaga had to pay IPPs this year, it would mean a saving of RM135 million!
What is significant is that neither the Minister nor the Deputy Minister for Energy, Telecommunications and Power had responded to my query about companies which are prepared to generate and sell electricity to Tenaga Nasional at less than 10 sen per unit - which would obviate all necessity by Tenaga Nasional to increase electricity tariff and increase the burden of the consumers.
The government should not allow any increase in electricity tariffs for Tenaga Nasional next year unless and until there is review and standardisation of the IPP rates of electricity sold to Tenaga Nasional.
(28/12/96)