SESB launches operations room to explain subsidy gradualisation on electricity tariff

With the recent announcement of electricity tariff revision, consumers are expected to have questions and complaints pertaining to how they would be affected by the new energy rates.

Some will be directly affected while some (who use 300kWh or less energy) will be indirectly impacted by the expected increase in goods and services costs. Simply put, every consumers will be affected in one way or another.

The question is, how bad could it gets.


One of the critical areas the utility company needs to improve is supply security - how reliable the supply is. Photo: Kayu Madang PMU, by de engineur.


Operations Room for Tariff

Sabah Electricity Sdn Bhd (SESB) has launched an operations room (BGT) to enable the public to get information on the subsidy gradualisation on electricity tariff announced Monday (Dec. 2, 2013).

"The operations room was activated on Dec 2 and is handled by three personnel. It is open Monday to Friday from 8am to 5pm and on Saturday from 8am to 12.30pm. It is closed on Sunday," SESB general manager (distribution) Ahmad Sazree Abd Aziz told reporters in Kota Kinabalu recently.

The public could submit queries and complaints by coming to the operations room on the ground floor of Wisma SESB in Karamunsing or dial toll-free line 1-800-88-4500 or via e-mail tariff@sesb.com.my.

According to Ahmad Sazree, consumers could also surf SESB's website at www.sesb.com.my which has the current electricity bill calculation facility to help consumers plan their power usage.

In short, these are the means of communication on tariff queries:

Call      : 1-800-88-4500 (Tariff Helpdesk)
Fax      : 088-282451
E-Mail  : tariff@sesb.com.my


TheGreenMechanics: I have sent query to the above given e-mail address (tariff@sesb.com.my) and am currently waiting for SESB's reply. Let's see.


Source: Bernama

Electricity tariff up by average 15% and 17% from Jan 1, 2014

You and I should brace ourselves for a 15% (Peninsula Malaysia) and 17% (Sabah and Labuan) hike in electricity tariffs next year.

Those are the averages of electricity tariff increase announced by the minister concerned few days after hinting that the government will raise Electricity Tariff by 10% to 20% in 2014 earlier.


The government says the tariff adjustment is a step to restructure subsidies into a form that is more targeted and sustainable.


To be exact, the average electricity tariff in:-

• Peninsular Malaysia will be up 4.99 sen/kWh (14.89%) from the current average rate of 33.54 sen/kWh to 38.53 sen/kWh. 
• Sabah and Labuan will be up 5.0 sen/kWh (16.9%) from current average rate of 29.52 sen/kWh to 34.52 sen/kWh.

Rates in Sarawak will not be affected because the electricity supply in the state is operated by state-run company, Sarawak Energy Berhad. There is a clear advantage in being able to control the utilities on your own, isn't it!

The new rates will take effect from Jan 1, 2014.


How it is compared to the existing one. Graphic by TheMalaysianInsider


Who will not be affected

Note that 70.67% of consumers in Peninsular Malaysia and 62% of consumers in Sabah and Labuan will not be affected by the tariff hike. There will be no tariff increase imposed on the consumers who use electricity at a rate of, or lower than, 300kWh a month.

Translated into absolute figures, 4.56 million consumers in the peninsula and 260,000 consumers in Sabah and Labuan will not be affected by this hike.


Who will be affected the most

Consumers whose electricity consumption is more than 300 kWh will be directly affected by the tariff restructuring. The group most likely to be affected are those whose electricity usage is between 301 to 400 kWh and 401 to 600 kWh.


We will look at the electricity tariff restructuring implications on commercial and industrial users next.


Source: The Star

Malaysia to raise Electricity Tariff by 10% - 20% in 2014

This is what was announced in a very general manner by the Minister, to which it would normally be construed as tariff hike by TNB alone. But I have reason to believe that Sabah Electricity Sdn Bhd (SESB) will also be affected the same way.

Don't ask me why and how I came to such conjecture, but let's just speculate that if it happen, it will most likely be by similar quantum to the one in July 2011, which is 15%. Do you feel your business is hurt already?

But...if you think about the bigger picture, electricity tariff revision is actually inevitable as we move forward towards industry competitiveness, and that can be achieved by reducing subsidies, but let's do it in gradual manner and not making this a yearly affair.


"Anything below 20% is reasonable." - Datuk Dr. Maximus Ongkili


Electricity tariffs to go up next year
(The Star, November 28, 2013)

Consumers should brace themselves for a 10%-20% hike in electricity tariffs next year.

“The quantum (of increase) is not finalised … but anything below 20% is reasonable,” said Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili.

The final decision on the increase has yet to be made by the Cabinet, but the hike could happen anytime in 2014, he told reporters on the sidelines of a Parliament session yesterday.

The move, he said, would be in line with the Government’s plan to gradually cut subsidies.

It would also be in line with its efforts to boost efficiency and competitiveness in the Malaysian power industry, as well as to ensure sufficient returns to capital for utility company Tenaga Nasional Bhd to cover its costs.

A tariff hike will see rates for both industrial and households increase, but any hike for businesses will be mitigated against the need for them to remain competitive. A home appliance that is rated at 1,000 watts, if left switched on for one hour, would use 1 kilowatt-hour (kWh) of electricity.

A 10%-20% hike would translate into an increase of 3.35 sen/6.7 sen per kWh to 36.85 sen/40.2 sen per kWh. This is based on the prevailing tariff rate of 33.5 sen per kWh, which is about 8.5 sen below the “true cost” of power at 42 sen per kWh.

In comparison, electricity tariffs in the Philippines and Thailand are 58 sen per kWh and 48 sen per kWh respectively.

Ongkili said the Government would implement a “stabilisation” programme to protect consumers, especially the low-income group, when the tariff hike takes effect. Details of the programme have yet to be finalised.

The electricity tariff was last revised in June 2011 after the Government raised the subsidised gas price for the power sector to RM13.70 per million metric British thermal unit (mmbtu) from RM10.70 per mmbtu.

Gas accounts for about 50% of electricity generation in peninsular Malaysia. Coal accounts for 40%, hydropower about 8% and renewable sources around 2%.

Subsidies for the power sector are RM8bil to RM12bil per year, depending on the prevailing price of gas. The Government’s share is RM150mil and the rest is borne by Malaysian oil and gas company Petroliam Nasional Bhd.


TheGreenMechanics: They say it's done in the name of efficiency & competitiveness. Let's see if we can achieve this.

Focus group to address power woes in Sabah

This is a move that should give you a bit of a reason to cheer up. The government will form a focus group to monitor and advise on the implementation of electricity supply projects in Sabah.

It's essentially a committee that will report to the Energy, Green Technology and Water Minister on matters relating to the planning and implementation of electricity supply projects in the state.

Composition of the focus group:

• Dato’ Seri Mahdzir Khalid - Chairman
• Energy Commission representative
• Tenaga Nasional Berhad (TNB) representative 
• Sabah Electricity Sdn Bhd (SESB) representatives
• 7 Barisan Nasional backbenchers from component parties in Sabah.

The terms of reference (TOR) of the focus group:

• to monitor closely the development and implementation of power generation, transmission and distribution projects, particularly those approved under the Tenth Malaysia Plan, 
• to study the electricity tariff,
• to look at SESB’s turnaround.

The other agencies that will be involved include the Economic Planning Unit and Public Private Cooperation Unit of the Prime Minister’s Department, Finance Ministry, Infrastructure Division of the Rural and Regional Development Ministry, Sabah State Economic Planning Unit and Sustainable Energy Development Authority.

“The government is committed to addressing the electricity woes in Sabah and the formation of the focus group will step up the efforts.”
- Energy, Green Technology and Water Minister, Datuk Dr Maximus Ongkili

The minister said various measures would be in place within the next three years, which are expected to ensure sufficient electricity supply for Sabah for the next decade.


Sabah's current electricity supply status

Sabah’s installed electricity capacity is at 1,344MW and available capacity is about 1,100MW while demand is at 870 to 950MW, with a reserve of between 20 MW and 100 MW. The available capacity is lower than the installed capacity due to contingency for planned power outage and forced outage.


TheGreenMechanics' 2 cents:
I agree with the notion that, for us to address Sabah’s electricity woes, every party has to cooperate and be rational. While the rakyat can cooperate by willing to wait and stretching their patience to the limit, those given the power/trust to manage the situation would also need to show urgency.

AND for once, please avoid giving excuses when you cannot fulfill pledges.

More readings here.

FiT in Sabah has been suspended

This is to recap that the FiT implementation in Sabah has been suspended except for Small Renewable Energy Power (SREP) Programme projects which reached commercial operation date by Dec 31, 2011.

What is FiT

A feed-in tariff (FiT) is a rate of money paid by the government to homeowners or organisations to generate their own electricity through small-scale green energy or renewable energy installations. In Malaysia, renewable resources covered by the FiT includes biogas, biomass, small hydropower, and solar PV.

TNB/SESB to pay grid-connected RE producers. Image: Kolopis Main Intake substation (PMU)

Why the suspension in Sabah?

I read about this in Business Times few days ago whereby SEDA chief executive officer Badriyah Abdul Malek said "It would be justifiable for the Sabah Government to contribute to the RE Fund, following the suspension of FiT implementation there," in a press interview.

I dug for a little bit more and found that earlier in March 2012 The Star reported the same. This means the suspension could have been imposed no longer than 2 months back.

From the few press reports, I can only deduce that the suspension was due to Sabah not contributing to the RE Fund set up by the government when the FiT was implemented in December last year. Sabah government appealed for a delay in RE Fund collection as it would be too taxing on consumers here since electricity tariff has just been increased by about 15% in July 2011.

No contribution, no benefit so it seems.

The eligible SREP I mentioned earlier covers only 5 green power producers as they are already operating commercially, as of December 2011. Total power generated by these RE entities is 36.5MW.

On the same token, the rumoured JV between SEC and SESB to build solar farm mentioned in my article Cypark and TNB signed Renewable Energy Power Purchase Agreement, will not metarialise after all. This is somewhat turning into a sad ending.

We can still participate in the FiT

What we can do is simply contribute to the Renewable Energy (RE) Fund. The heavy energy users in Sabah has not yet been levied for the energy consumed and as it was the State Government who appealed for delay of the RE Fund collection, it is just fair that the same government shoulder the obligation to contribute.

As per the Chief Minister's recent 2012 budget presentation Sabah seem to have a lot of money in its reserve coffer. Use it.

As SEDA CEO mentioned, it is not fair that only industry players (heavy energy consumers) in Peninsula Malaysia are being levied but not consumers in Sabah.

Power tariff restructuring - Some win, some lose, and some are losing big time

The sweeping statement by SESB regarding the recent tariff rate increase is somewhat misleading, and to some extent disappointing even if one can understand the justification for the restructuring.


Granted, the more-or-less 75% domestic consumers are safeguarded. Some 70,500 consumers even get kind of pleasant surprise as a result of the exercise, they stand to pay less than the amount they are currently paying.

Those who are currently paying a monthly bill of RM20.00 and below continue to enjoy the rebate from the government. In other words they enjoy electricity for free until further notice.

The electricity supply provider, however, FAILED to mention the painful fact that there would be certain consumers (especially Commercial and Industrial sectors) that would suffer an increase of as high as 45% in energy cost. Now that's what I call HUGE jump! I have few case studies and this is exactly what I found out.

Few weeks ago I found myself in the wrong place at the right time to be sitting among journalists in a press conference. During the briefing, SESB's Managing Director, Datuk Ir. Baharin Din explained that:

The cost of producing 1 (one) unit of electricity in Sabah is -

75.54 cent - without subsidy on gas by Petronas, and
44.60 cent - without government subsidy on fuel.
31.69 cent - WITH govt subsidy.

How much does SESB charge consumers for each unit of electricity? That's 29.25 cent on average. From every angle one look at it, it is a losing business model. But, should it be that way?

Ir. Baharin further explained that even with the revision of tariff rates, the utility company is still not making money yet and it still need the assistance from the government to keep going.



Ir. Baharin Din explaining the tariff restructuring to journalist


In the water industry there is a term Non-Revenue Water (NRW) to denote water that is lost between point of production and the consumer's tap. Sabah's NRW is currently among the highest in Malaysia. Let's not let SESB fall in the same pit as the Water supply. I recon that SESB's immediate challenge is the non-revenue electricity (if I can call it that) in the form of, or due to

• power theft


• equipment/cable theft


• frequent power outage


• ageing equipment


• human resource restructuring

While calling for human resource restructuring may not be justified (and it may not even be an issue), the first four are factual. In fact, if one compares SESB's situation to SESCO and TNB, it is still lagging behind in terms of managing the above.


Table 1: Summary of the impact of SESB electricity tariff revision on consumers.


I mentioned earlier that some consumers (such as industry players) are affected by increase of power cost by more than 40%. The following is a typical scenario:

EXAMPLE
Company XYZ is taking supply at low voltage and is consuming 320,000 kWh of energy every month with Maximum Demand of 500kW.

Prior to July 15, 2011 Company XYZ would be categorised under Tariff ID2:
MaxDemand - RM7,500.00 (500 x RM15.00)
Energy Usage - RM64,000.00 (320,000 x RM0.20)
TOTAL MONTHLY: RM71,500.00

After July 15, 2011 Company XYZ is re-classified to Tariff ID1 (due to new criteria):
MaxDemand - none (no M.Demand charges)
Energy Usage - RM102,400 (320,000 x RM0.32)
TOTAL MONTHLY: RM102,400.00

Increase = RM30,900.00 or 43.2%

That is RM370,800 annually. Maybe the boss would think twice now about giving out bonus this year end. Sadly, this could be true for many enterprises.

The bigger industrial consumers do have associations of their own. They should bring their issues up to SESB through special meeting and or dialogue.

For your reference, check out the new rates you are paying in New Tariff Book. If the link is not working or is slow in downloading, check the simplified table here.

Electricity Tariff: Another Revision?

The title of this entry is not a question. It is an expression of disbelief and in some way in amusement at how the powers that be deal with one of our basic necessities in the modern day. 

Firstly, the far-reaching hands and mighty government of the day must take good care of the welfare of the people to ensure good quality of life. Secondly, for an oil and gas producing country such as Malaysia, it is obligatory for the  government to provide for a reliable and affordable supply of electricity to the people.

Not my saying. I was trying to put myself in the shoes of those opposing "resiliently" the idea of power tariff increase.

I am NOT against the idea of increasing the rate. If done the right way, and I'm not going to elaborate what is that right way, I am all for it. All for it? That sounds a bit on the extreme but what I'm saying is that I will agree to a properly drafted revision, that's all. I am a consumer just like all of you and I don't want another hole in my already shallow pocket. But why not? All good things like cheap stuffs will come to an end someday. So is our cheap electricity.

If you google  enough you will find that Malaysia's power cost is one of the lowest in South East Asia and Sabah's SESB electricity tariff is still low compared to Sarawak's SESCO and Peninsula Malaysia's TNB. SESB rates are however less interesting as it lacks the peak hour variaty and industrial sector has less 'optimazation' options. You can compare electricity tariff of ASEAN member countries in what Beni Suryadi compiled here.

Let's take a look at the current tariff in Sabah (since 25 years ago):

Source: SESB

Sarawak's SESCO tariff effective April 2007:

 Source: SESCO website.

West Malaysia Domestic tariff. Source: TNB

For industrial, commercial and others, visit TNB Industrial Tariff here.


TNB have just announced its tariff restructuring and SESCO did it in 2007, while SESB's last revision was about 25 years ago. To be fair to SESB based on the timeline alone, I'd say review is overdue.

However, while setting their eyes on the imminent, SESB must:

1. Not equate low tariff to unreliable supply. They are not the same although we hear poorly-advised leaders claiming so.

2. Translate low SAIDI to real life elimination reduction of power supply interruptions. I can give monthly data for power interruptions of several West Coast city/townships in Sabah if required and I'm not at all impressed. Three to four power failures in a month is not uncommon and this rate would drive some people nuts if it happens to TNB facilities.

3. Beef up its power theft eradication Task Force. Do you know that SESB is losing some RM3mil in revenue due to power theft? Some one can set up a SME entity and work around this figure to provide SESB with solution, in my humble opinion.

4. Be transparent. On how SESB manage itself is none of my business. What I hear on a daily dosage is complaints and all sort of allegations (both baseless and those with facts) by certain quarters. So, do what you need to do and what needs to be done. You do have a lot of wise heads in your organisation.

Talking about SAIDI (average power outage/blackout duration for each customer), TNB's record for the last two years was around 70 minutes. Our neighbour, Singapore records an average of 2 minutes (check it out Here and scroll to page 19) per customer. SESB recorded 867.4 minutes per customer last year. That's ten times of what was recorded in Peninsula Malaysia. Compare that with those of Singapore's!

Are you happy with what you see? Are you happy with the frequency of power outage in Sabah? I am not.

Again, don't equate LOW TARIFF to UNRELIABLE power supply. Of course, having more money will solve many supply issues but I can't see it as the sole justification for increasing the power cost. It is how efficient you manage the resources that matter.

Finger crossed SESB will come good.