Cabinet to decide on gas, power tariff hike, says Chin

KUALA LUMPUR: There is a need to raise gas and electricity tariffs but it is for Cabinet to decide, Energy, Green Technology and Water Minister Datuk Seri Peter Chin said.

"The six-month interval of tariff revision for gas and electricity has not changed. The policy was not scrapped. The ultimate decision on whether or not to raise the tariffs lies with the Cabinet," he answered when asked if the government intends to raise gas and electricity prices from June 1 2012.

"Right now, gas supply to the power-generation sector is priced at RM13.70 per mmBTU (one million British Thermal Units), while the international market price is around RM40 per mmBTU. 

"So, you can see how much gas subsidies the government is shouldering," he added. "So, while there is a need to revise the tariffs, my ministry can only act on Cabinet's decision," he told reporters after officiating at the EU-Asia Biomass Best Practices and Business Partnering Conference 2012 here yesterday.

The last price hike in gas and electricity was on June 1 2011. At that time, natural gas price sold to the power sector was raised 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 by the government for residential households with a monthly bill of up to RM20, however, was maintained.

Last week, an explosion at the Penampang main intake substation caused a major blackout throughout Sabah and Labuan. When asked what had caused the explosion, Chin said: "I've been told that due to frequent fluctuation in electricity flow there, the equipments were subjected to extreme stress. The explosion, somehow, escalated tripping throughout the state grid.

"We're now looking at how best to prevent such tripping in the future. There's not enough capacity in the east coast. It takes time to plant up, it cannot be solved overnight," he said. 

He added that if the initial plan for a 300MW (megawatt) coal-fired plant at Felda Sahabat estate in Lahad Datu had proceeded, it would have been up and running by 2010. 

"Now, we'll have to wait for the 300MW gas-fired plant in Kimanis, Papar to come on-stream by December 2013," Chin said. Upon commercial operations then, he said, the Kimanis Power Plant will be the biggest in Sabah.

On average, Sabah's daily supply of electricity for consumers is 780MW. He noted that Sabah's current spinning reserve is too low at less than 10 per cent. "It should be more than 20 per cent."

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