Tariff review will help improve electricity supply in Sabah, Labuan

Dec 2: The electricity tariff review will help improve electricity supply in Sabah and Labuan, Minister of Energy, Green Technology and Water, Datuk Seri Dr Maximus Ongkili said today.

He said the new tariff structure was also necessary to close the increasing gap between generation costs and current tariff rates, so that the Sabah Electricity Board Sdn Bhd (SESB) would be able to better serve the people.

He told a press conference that for Sabah and Labuan, the average electricity tariff would be increased by 5.00 sen/kWh or 16.9 per cent from the current tariff of 29.52 sen/kWh to 34.52 sen/kWh, effective Jan 1, 2014.

The minister said that for 62 per cent or 260,000 consumers in Sabah and Labuan from a total of 418,000 domestic consumers, will benefit from this consideration.

For the lower-income group, the government will continue to give rebates to consumers whose electricity bills are RM20 and below until Dec 31, 2014, nationwide.

Maximus pointed out that the current average electricity tariff, which is 29.52 sen/kWh, is only able to cover 80 per cent of SESB’s operational costs and does not reflect its true cost of electricity generation, which is 43.46 sen/kWh.

SESB’s low electricity tariff has constrained efforts to improve the quality of electricity supply in Sabah.

However, the current performance of supply in Sabah and Labuan has improved compared to previous years.

This can be seen from the reduction of the System Average Interruption Duration Index (SAIDI) from 2,867 minutes/consumer in 2009 to 557 minutes/consumer in 2012.

Through ongoing efforts and assistance from the government, it is hoped that the SAIDI will improve this year, targeted to be less than 450 minutes/consumer/year, he said.

In tandem with the electricity tariff review in Sabah and Labuan, the Federal Government has agreed to allocate RM1.812 billion in grants to implement projects to strengthen new infrastructure, notably the Southern Link Transmission Line as well as other critical transmission projects from 2014 to 2016.

The government also allocated RM230.6 million from 2013-2014 to finance projects aimed at improving SAIDI throughout Sabah.

Similar to the implementation in Peninsular Malaysia, for Sabah and Labuan, the government will continue to give a subsidy of 33.09 sen/kWh for domestic consumers under the 0-200kWh/month category, equivalent to 186 per cent of the average tariff for that consumer category.

Likewise, the government will provide a subsidy of 30.04 sen/kWh or 144 per cent of the average tariff to domestic consumers in the 201-300kWh/month bracket.

The government will have to continue to shoulder the burden of subsidies, through revenue foregone for the supply of natural gas.

For Sabah and Labuan, the total amount of subsidies for fuel oil is RM570 million per year, out of which RM155 million a year, is attributed to consumers using less than 300kWh/month.

 

 

 

source: New Straits Times