ASEAN KEY DESTINATIONS
Malaysia looks to split up power supplier
The Malaysian government is looking into the proposal to split Tenaga Nasional Bhd (TNB) into the three units of power distribution, generation and transmission.
Energy, Green Technology and Water Ministry secretary-general Datuk Loo Took Gee confirmed that the matter was “under study”. She declined to elaborate.
“I think we need to be quiet and do our work well to present it to the market when we're ready,” Loo said when asked to comment on the matter.
Speculation is rife about a proposal to split up TNB in order to reorganize the dominant electricity supplier and to help it fix its financial woes.
TNB recently said it faced an additional RM3bil in costs from having to look for alternative sources of fuel for power generation due to a shortage of gas supply.
It has been reported that newly-established special purpose vehicle, MyPower Corp, will oversee TNB's “break-up” as part of the government's effort to reform the country's power sector.
MyPower, which is currently under Loo's ministry, is headed by Datuk Abdul Razak Majid, a veteran in the power sector who was formerly TNB senior vice-president of corporate affairs.
The special unit's task involves restructuring the legal and regulatory framework of the industry to make it more equitable, competitive, liberalised and provide a level playing field.
“MyPower will conduct studies based on nine aspects including power purchase agreements, governance issues, gas supply and tariff issues,” Loo said.
Asked if it was studying the deregulation of the power industry, she said: “Yes... this is also part of MyPower's task.”
Loo also said MyPower was reviewing the power purchase agreements with independent power producers.
In May, Energy, Green Technology and Water Minister Datuk Seri Peter Chin said the ministry was being assisted by MyPower and the Energy Commission to implement several changes to the country's electricity supply sector as identified by Khazanah Nasional Bhd on the need for reforms in the energy sector. “These changes are needed for a vibrant energy sector,” he had said.
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