Consumers must be given a chance to be heard before Cabinet takes a decision on the proposal for a new round of power tariff increases

Media Statement
by Lim Kit Siang

(Petaling Jaya, Friday): The Minister for Energy, Telecommunications and Posts, Datuk Leo Moggie, gave a very clear hint yesterday that there would be another new round of increases of power tariff rates when he said that Tenaga Nasional "may be allowed to impose higher tariffs because it is becoming increasingly costly to provide adequate electricity supply of high quality".

He said it was not unreasonable for consumers to pay more if they want secure and quality electricity supply.

It is definitely unreasonable for consumers to pay more as secure and quality electricity supply had always been an implicit term of the contract between the consumers and Tenaga Nasional, and it is most shocking for the Minister for Energy, Telecommunications and Posts to suggest that consumers have to pay more if they want secure and quality electricity supply, as if this is a a completely new thing altogether and something unheard of in the past four decades of Malaysian nationhood!

In the process, Leo Moggie has turned a "vice" of Tenaga Nasional into a "virtue", using it as the basic reason for a new round of power tariff increases. This is completely unacceptable. What has happened to the previous boasts by Tenaga Nasional and its predecessor, Lembaga Letrik Negara, about providing secure and quality electricity supply to the consumers?

Leo Moggie should make public Tenaga Nasional proposals for revision of tariff rates which had been submitted to the Ministry of Energy, Telecommunications and Posts as before the Cabinet makes any final decision on the matter, the Malaysian consumers must be given a chance to be heard - especially as the last tariff revision was only in March last year.

The government should reject any request by Tenaga Nasional for a new round of electricity tariff increases especially as Tenaga Nasional is unable to improve on the quality of its service in reducing the high incidence of power interruptions.

Recently, Subang residents in Bandar Subang Jaya, Bandar Sunway and USJ in Selangor experienced repeated power supply disruptions of up to eight hours.

In the last Parliamentary meeting, the Deputy Minister for Energy, Telecommunications and Posts, Datuk Chan Kong Choy told DAP MP for Kota Melaka, Lim Guan Eng that an average of 277 power breakdowns a day were detected last year throughout Peninsular Malaysia between January and November, which would mean over 100,000 power breakdowns for the whole of last year, apart from the 17-hour nation-wide power blackout on August 3.

With such a shocking record in power supply, what right has Tenaga Nasional to ask for another round of tariff rates increases?

Tenaga Nasional has refunded RM70 million to consumers for the nation-wide blackout last August and RM4 million for the 10-day power blackout on the Penang Island in June 1995 in the form of a 10 per cent rebate, but this rebate of RM74 million should not be used as "sweeteners" to justify a new round of power tariff increases.

Tenaga Nasional is suffering from the burden of the high costs of electricity charged by Independent Power Producers (IPPs), as it has concluded very exorbitant rates with IPPs, as seen by the following:

IPPs Power sold to Tenaga (Sen per unit)
Genting SanyenPower Sdn. Bhd. 11.8
Port Dickson Power Sdn Bhd 13.0
Powertek Bhd 13.1
Segari Energy Venture Sdn.Bhd 13.5
YTL Power Generation Sdn. Bhd. 15.5
Bakun Hydroelectric Corp Bhd 16.5

The price fixed for the Tenaga Nasional to buy electricity from the IPPs are exorbitant and against the public interest, as the cost of generating power by Tenaga itself is well below 10 sen per unit.

It is open secret that there are companies which are prepared to generate and sell electricity to Tenaga Nasional at less than 10 sen per unit, which the government would have been able to take full advantage of if it had called for public tenders and invited bids for intending IPPs and signed Power Purchase Agreements with those offering the lowest sale price per unit of electricity, instead of entering into secret IPP deals with selected companies.

If the average cost of IPPs’ rates are reduced by one sen per unit, based on the RM2.26 billion which Tenaga had to pay IPPs last year, this would mean a saving of RM135 million!

This is why before the government considers the new proposal by Tenaga Nasional for another increase of power tariffs, Tenaga Nasional must re-negotiate with the IPPs to standardise their electricity rates and reduce the burden on the consumers.

Tenaga Nasional and the IPPs must be seen to be fair to the consumers before the Malaysian public are asked to bear another new financial burden through a new round of increase of electricity tariffs.


*Lim Kit Siang - Malaysian Parliamentary Opposition Leader, Democratic Action Party Secretary-General & Member of Parliament for Tanjong