DAP fanboy and anti-BN blogger Anil Netto makes a few simplistic comments on the recent electricity tariffs in his blog recently. (read it here…)
As usual, these bias political bloggers disguised as neutral commentators make it a point to write as much falsities as possible to make their point.
Let’s get things straight. All consumers using less than 300 kWh are not affected by the new tariff rates. Especially those in the lifeline band category – that is, domestic consumers who consume 1 – 200 kWh per month – who enjoy a rate of 21.8sen/kWh. A rate which has not been raised since 1997. This covers about 3.25 million users. For those who use below 91kWh a month (i.e. if their monthly electricity bill is below RM20), electricity is free. They don’t have to pay a sen.
Anil uses an example of where those whose electricity bills come to more than RM 200 will see an increase of 17% instead of the announced 14.9%. First of all, the 14.9% is an average calculation. There are many bands when it comes to electricity usage and calculations.
With the tariff review, the bands have been reduced from 9 to 5 bands.
The new revised tariff also gives consumers the opportunity to determine/decide their consumption rate and how much they pay by adopting energy efficiency and energy conservation measures.
Many question the need for the tariff revision. We must understand that it was not an option. With rising global fuel costs (fuel makes up 82% of the tariff), is was no longer sustainable for the government to continue subsidising these increasing fuel prices.
In the same blog piece, Anil states that we are paying the price for all years of huge profits for the IPPs under lopsided concession agreements – which were at the expense of TNB.
To fully understand how IPPs came about, we have to know a bit about the history of the electricity sector.
In the early 1990s, the commercial risks of constructing new power plants were relatively unknown for the country. There were also technical risks as the gas turbine technology was new to the sector. There were no comparable projects that could be used for the basis of valuation and pricing of the IPPs. There was no precedence in financing IPPs then, and the banks had to be convinced of the project viability. On the other hand, there was a great need to address the tremendous growth in demand for electricity that Malaysia had as a developing country. The government had to ensure that the supply of electricity was sufficient and reliable. IPPs were brought in to help close this gap between demand and supply.
Of course, being first generation IPPs, they had much more power on the negotiation table. And do no forget – the IPP plants were financed by private financial institutes, unlike TNB plants which were financed and guaranteed by the government.
Anil also fails to mention the RM 325 million allocation the government has announced for renewable energy initiatives. (link here)
Anil also writes that TNB posted a profit before tax of RM5.9bn for its last financial year.
Which is true. But irrelevant. TNB has to be profitable. Profits are used for capital expenditure to maintain an efficient capital structure, and for improvements in the network’s performance (transmission and distribution). TNB still pays taxes and has its performance benchmarked against both its local and global peers. Like any other business entity, profits keep it sustainable.
Come on lah Anil. Dont just whack. Use some proper stats and sources. Its all on the internet anyway.