Friday, September 28, 2012

Higher gas and power tariffs?

REFLECTING MARKET PRICES: Ministry to decide and make its recommendation to the Economic Council by December

THE Energy, Green Technology and Water Ministry has recommended to the Economic Council that electricity and gas tariffs be raised to better reflect market prices.

The government is expected to decide on electricity and gas tariffs by December.

The last hike in gas and electricity prices was on June 1 last year.

At that time, natural gas price sold to the power sector was raised by 28 per cent to RM13.70/mmBTU from RM10.70/mmBTU. 
The average electricity tariff went up 2.23 sen/kWh (kilowatt hour), or seven per cent, to 33.54 sen/kWh.

Electricity rebate for residential households with a monthly bill of up to RM20, however, was maintained.

"Although the tariffs have remained unchanged for more than a year, we have continued to monitor and make the appropriate recommendation on tariff revision for gas and electricity every six months," said Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui.

"We have forwarded our proposal for revision in electricity and gas tariffs to the Economic Council," he told reporters after officiating the Fourth Energy Forum here yesterday.

"The ultimate decision on whether or not to raise the tariffs lies with the cabinet. My ministry can only act on cabinet's decision," he added.

Six months ago, the Energy Commission announced the groups that had submitted their bids to build a new 1,000MW-1,400MW gas-fired power plant in Prai, Penang. 

Among them were 1Malaysia Development Bhd (1MDB), which has teamed up with South Korean Hyundai Engineering & Construction, YTL Power International Bhd with Marubeni Corp of Japan, CI Holdings Bhd and Teknologi Tenaga Perlis Consortium Sdn Bhd with Daelim Industrial Co Ltd of South Korea, Amcorp Power Sdn Bhd with Mitsui & Co Ltd, and Malakoff Corp Bhd and Petronas Power Sdn Bhd with Mitsubishi Corp of Japan.

In response, Chin said the government will announce the winner next month. 

"The competitive bidding ensures the use of the latest turbines that optimise gas use. We want value for money," he said.

"We will also announce details on the extension of the first generation power purchase agreements next month," he added.

Read more: Higher gas and power tariffs?

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