Power tariff may be next to rise

By TEE LIN SAY

PETALING JAYA: With the recent rise in sugar prices by 20 sen per kg from Jan 1, some analysts are saying the next thing to head upwards might be electricity tariffs.

The possibility of an increase in electricity tariffs has already seen some companies and industries making a push towards energy saving solutions.

Presently, Malaysia’s tariff rates are the third lowest in the region after Vietnam and Indonesia.

Focus Dynamics Technologies CEO Kee Twuan Tee

A tariff review will be imminent if the international prices of gas and coal rise, as seen in 2007 and the early part of 2008.

Natural gas prices have surged by some 74% and coal prices by 17% since early November last year due to the stronger demand in winter.

“Although there has been no Cabinet decision for now, Tenaga Nasional Bhd’s (TNB) electricity tariffs will nevertheless be reviewed again in January-February given the Government’s bi-annual energy review policy,” said AmResearch analyst Alex Goh.

Another power analyst noted the Government increased sugar prices knowing this would affect the lower income group.

“Hence there is a possibility the Government will increase tariffs, as this will affect the middle-income group rather than the lower-income group,” said the analyst.

When contacted, energy efficiency solutions provider Focus Dynamics Technologies Bhd chief executive officer Kee Twuan Tee said the last quarter of 2009 already saw a 20% increase in customer orders for energy efficiency solutions.

Customers were mainly hotels and owners of commercial buildings that presently had hefty electricity bills.

“Our customers are starting to talk about increasing revenue not just from sales, but also from cost savings. For a typical commercial building, the electricity bill amounts to about RM500,000 to RM700,000. Seventy per cent of this goes to air-conditioning, while the remainder is for lighting and heating,” Kee said.

He said energy efficiency solution products could reduce electricity bills by some 20%, with the return on investments on the solution over three years.

About 90% of the Putrajaya precinct was wired with Focus’ energy efficiency drives. There are currently some 12 players in the energy efficiency solutions sector in Malaysia.

Meanwhile, TNB is now paying a subsidised gas price of RM10.70 per million British thermal units (mmbtu), which is lower than the market price of about RM12 per mmbtu.

(Ecologikal Note: Malaysian Government should stop the subsidy and let the market determines the real energy cost. Did we not hear TNB has record profits in recent years?)

Electricity tariffs in Peninsular Malaysia were last adjusted on March 1 last year, reduced by an average of 3.7% following the 24% hike in July 2008.

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