ASEAN KEY DESTINATIONS
TNB spends RM6bil for new infrastructure, maintenance, capex annually
KUALA LUMPUR: Tenaga Nasional Bhd (TNB) is spending at least RM6 billion for new infrastructure, maintenance and capital expenditure (capex) annually to ensure power supply sustainability.
Justification should be made, as the amount is evidently much higher than RM4.6bil profit the utility giant registered recently for financial year ended Aug 31, 2013.
Of the RM6bil, TNB is investing about RM3.5bil to RM4bil annually for new supply and system improvements on its distribution networks and multi-connection channels.
TNB is also investing between RM2bil and RM2.5bil annually for the transmission network enhancement and development.
As a RM99bil asset-based company, the profit is considered minimal as TNB is only making RM4.6bil profit, compare with other conglomerates, which are making at least half of their asset values.
The review of the electricity tariff should be seen as essential to TNB to meet rising costs of supply, reinvestment in ageing supply equipment and to continue making improvements in providing reliable and quality electricity supply.
Effective Jan 1, 2014 the average electricity tariff in Peninsular Malaysia will be increased by 4.99 sen/kWh, or 14.89%, from 33.54 sen/kWh to 38.53 sen/kWh.
The adjustments were based on four components; one of them is the revision of TNB's base tariff by 2.69%, or 0.90 sen/kWh, from the current average tariff.
The 0.90 sen/kWh only contributes about 18% of the total tariff increase and that is to cater to TNB s operational costs as well as the required investment in the infrastructure of the electricity supply.
The other three components, which made up the balance of 82%, are a result of an increase in fuel cost, which consists of piped gas, liquefied natural gas (LNG) and coal prices.
TNB will be paying RM15.20 mmBTU (Million Metric British Thermal Units) for piped gas, compared with RM13.70 mmBTU currently.
In March 2009, the Government has decided that the gas prices will be reviewed every six months but it was deferred then due to the global financial crisis.
The previous gas price revision was in June 2011 from RM10.70/mmBTU to RM13.70/mmBTU thus the electricity tariff was adjusted accordingly.
On top of that, for LNG, TNB will be paying market price, at RM41.68/mmBTU, while coal prices are hedged at US$87.50/metric tonne, higher from US$85/metric tonne before.
In introducing the new electricity tariff structure, the Government ensures that the lower income group is not affected.
The revision will not affect about 70.7%, or 4.6 million domestic customers, which means customers with monthly bills of RM77 and below will not experience any tariff increase.
The rebate from the government for domestic customers using electricity up to RM20 per month is still maintained whereby there are about a million of domestic customers in this category.
TNB has always acknowledged the plight of the lower income group and will definitely ensure that they are not burdened by the tariff review.
Notwithstanding the tariff review, TNB s rates are still competitive within the region.
At 38.53 sen/kWh, it is much lower compared to Singapore (63.63 sen/kWh) and the Philippines (57.24 sen/kWh) while slightly higher than Indonesia (24.40 sen/kWh) and Thailand (36.88 sen/kWh). - Bernama
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