TNB Talks

http://www.bernama.com/bernama/v5/newsbusiness.php?id=386595

KUALA LUMPUR, Jan 29 (Bernama) - Tenaga Nasional Bhd (TNB) gains nothing at all from the drop in oil price, said its president and chief executive, Datuk Seri Che Khalib Mohamad Noh.

Also correcting any perception that TNB used oil to generate electricity power, he said: “We use coal, gas and hydro power to generate electricity for the country.”

Che Khalib said this said during a recent interview on Bernama TV’s 1konsumer@bernamatv programme which discussed the topic of electricity and consumers.

Even during the time when the price of oil had shot up to US$150 a barrel, gas was sold at below market price to TNB compared with the much higher price of gas in the world market then, he said.

The gas price was RM14.31 per mmbtu for TNB.

This price is still much lower than the world market price now, he said.

“Therefore, when people ask why when the price of oil has come down and gas price has not, it is because the price of gas being sold to TNB is already a government subsidised price even if it had been raised from RM6.40 in July last year.

“To bring it further down from RM14.31 will mean the government has to give even more subsidy.

“It is up to the government. It is not the problem of market price. It is a question of how much more subsidy the government wants to give,” he said.

Che Khalib said TNB used natural gas to generate electricity power in the peninsular and Sabah, drawn from indigenous reserve.

As for the price of coal, Che Khalib said during the fixing of tariff last July, the government had fixed coal price at US$75 per metric ton (pmt).

“It was fixed at that price although the price of coal at that time was going up drastically reaching US$150 pmt in November last year,” he said.

“However, because we are a GLC (government linked company), the government can decide on the policy and ask us to use the price of coal at US$75 although its market price at that time was much higher.”

He also said while the price of coal has eased since, it has not come down below the price of US$75.

Commenting on a news report that said TNB was not being sensitive by increasing its tariff, Che Kalib said consumers should also understand that TNB had to also make payments to the Independent Power Producers (IPPs).

If the prices of all three, namely gas, coal and IPPs do not come down, there is no way the tariff can be brought down, he said, adding that TNB still had to pay a high cost for production.

The business for TNB is also the same, it the cost is not recovered, then it will be seeing losses just like any other business, he said.

On the issue of TNB’s monopoly, Che Khalib said a company which is profit oriented cannot be the supplier of electricity power to a country.

He said in the 1980s and 90s, many countries had taken the initiative to break the monopoly on electricity supply such as the US, UK, Europe and Australia.

“They broke up power generation, transmission and distribution to be supplied by different companies to cut cost….

Now they have gone back to the single service provider, he said.

They found that the electricity tariff went up much higher after 20 years and the results were opposite to what they had anticipated.

“TNB is a public utility company. TNB is a GLC that not only thinks of income but it also has social responsibilities, to fulfill the initiatives and policies of the government to help consumers,” he added.

– BERNAMA

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