Thursday, December 05, 2013

Electricity tariff increase: 4 things KJ needs to know

Final updates, 9/12/2013: In defence of TNB
Updated: With apologies to MyPower Corporation [see paras 3 & 4].

Needs to do homework ..
Getting sloppy. A lot of people unhappy with the proposal to increase electricity tariff by 4.99 sen per kW/h starting Jan 1 direct their dissatisfaction at the Government, at PM Najib Razak, and the Minister responsible. That is natural. Others hurl abuses at the Tenaga Nasional Berhad and Petronas as well. That is to be expected, too. 
But for Khairy Jamaluddin to single out TNB and accuse the utility of thinking only of profits (instead of the people) over the tariff increase? Read h e r e. I say he's getting sloppy, not doing enough homework. And hypocritical, given that he is a full Minister in Najib Razak's cabinet. And downright irresponsible.
The First thing KJ needs to know before he accuses anyone else is this: TNB did NOT propose the tariffs to be increased. Repeat. TNB was NOT the one that proposed the tariff increase. That credit must go to MyPower Corporation the Energy Commission, the agency responsible for regulating the energy sector, particularly electricity and piped-gas supply. 
So, why did MyPower the Energy Commission ask the Government to increase the tariffs? 
That's the Second thing KJ needs to know. The tariff increase is a consequence of the Government's subsidy rationalisation program, which will see the removal of gas subsidies and the introduction of LNG at market prices. The only way to "pay" for the removal of these subsidies is to increase the electricity tariffs as proposed by MyPower. Khairy should have commended MyPower for having made sure that 70% of the consumers in Semenanjung and probably more in Sabah and Sarawak will not be affected by the tariff increase. (These are people who use less than 300kW/h or whose electricity bills are less than RM77 a month).  
The third thing KJ needs to know is that the increased tariffs will contribute nothing to TNB's profits. Zilch. Zero. Of the 4.99 sen increase, only 0.90 sen (18%) will go to TNB for capital and operational expenditure to do system improvement for the next four years. The rest goes to Petronas (3.92 sen or 79%) and coal 0.17 sen or 3.4%).  
The fourth thing KJ needs to know (because it is clear that he doesn't realise it) is this: he is a member of Najib Razak's administration, the very government that is promoting the subsidy rationalisation program to help stabilise its finances, the very government that appointed MyPower to do a job, and the very government that has approved (or will approve) the new tariffs. KJ cannot pretend that he is not part of of this decision-making process, part of this collective responsibility.
If KJ wants to be popular, try this: help make sure that the 70 per cent that his Boss is trying to safeguard from the effects of the tariff increase will, indeed, be spared when the affected 30% decide to pass down their higher bills to consumers. ie the very people in the 70% bracket! 

Read also:
KJ Sudah Melampau!!! Belasah keputusan kerajaan Najib Razak naikkan tariff elektrik 15%!! 
Circus Chimpanzee
TNB spends more than it makes


  1. MaPeng6:01 pm

    Salam Rocky,

    As a consumer of course I dislike price increases. Tapi myself heran why people do not read carefully first.

    When I first heard it, I pergi TNB website. It is clear there what are the threshold where the increase is applied.

    Lain kali pembaca baik baca dulu dan faham. Esp those oppo morons who jump around like monkees wout doing the research first.

  2. Mustapha Ong6:16 pm

    Dear Bro Rocky Bru,

    I fully support Khairy's blasted statement on the proposed increased of the electricity tariffs beginning next year. I suspect Khairy knows who are the stakeholders in TNB whose objective is profit and gains in their share holding of the national power house. Khairy is not exploiting the situation for his own political mileage and there is no need for him to enhance his Ministerial position. It's better for our own Ministers to criticise BN government's unpopular and unreasonable proposals and decisions, then leaving the criticism to the opposition. I think we should wait until the issue is blow up based on people's reaction that will invite the final reconsideration and decision of the PM himself. In this modern world of free social media, people are smarter than the government of the day. Another glaring example is recent decision by DBKL to raise the property tax rates in Federal Territories. BN is a responsible elected government by the people and for the people, so stay calm and just relax lah bro...our government's proposals and decisions, either BN or PR are always on the "flip flop" gear like a see saw!

    1. Anonymous6:49 pm

      In that case, Mustapha Ong must agree that Khairy should bash up Petronas, where Omar Ong the son is de facto chief, for passing the higher costs of piped gas and LNG to TNB.

      Correct? Thought not.

  3. Anonymous6:27 pm

    Kedai makan, kedai jual ayam, kedai runcit, kilang kilang, dan yang berkenaan semua guna lebih 300KW then apa impact nya? WIll roti canai , ayam, Milo dan barang seangkatan dg nya pun naik?. Business rule no 1 all expecses pass to consumer. Pas ni GST pulak. Tahniah kerana pilih Najib team.

  4. Anonymous6:30 pm

    I agree with MaPeng, KJ is caught in the web. Don't shoot from the hip. Pull it out, aim and fire.

  5. Anon 627PM,

    Precisely why I suggested that KJ helps make sure that the 30% do not pass the buck to the 70% ...

  6. 70% will not be affected (less than rm77/month).

    'make sure that the 30% do not pass the buck to the 70%'

    can you pls elaborate how would the 30% do it? (sebab yg guna lebih dari rm77/bulan pun termasuk dlm kumpulan 30%). tq

  7. Anonymous9:43 pm

    So u agreed this action needed to stabilise the economy... and then who make the economy not stable? Not everybody can be a smart leader but a good leader can come from anybody.

  8. Anonymous10:26 pm

    "BN is a responsible elected government, by the people and for the people, so stay calm and just relax lah bro."

    You can't make this stuff up.

    Thanks Brother Mus - I rest easy forward to the next couple of years knowing that BN is "responsible" with our money, even when I start boiling bark and leaves to survive.

    You da man.

  9. Anonymous10:54 pm

    this brew is delusional. that 30% not KJ responsibility to take. that was Najib doing.

  10. Anonymous8:03 am

    Is KJ planning to be a hero? As we know he was the fourth floor member as well as omar ong i guess. The fourth floor boys propose the hike,of fuel from 1.85 to 2.70 last time during Pak Lah tenure. Back then he did not care of rakyat his acting like he,understand the whole he planning his way up to topple everybody and make him look good??? Is he is affraid of Mukhriz influence that growing now?? Till now i did not see any new KJ is doibf. All he did is make a harsh statement,to FAM and act like he is brave. Trying to washed his bad image,previously?? Well KJ you won't get my vote till you benar2 taubat!!!

  11. Bro..

    There is a Malay proverb that says;

    "Menangguk di Air Yang Keruh.."

    I hope it does not apply to the scenario, so to speak.

  12. charleskiwi9:10 am

    ipThe implementation of more taxes are inevitable as the country is already in deficit ! I have on numerous occasions before and during the campaign of the GE warned you of that.

    Do you know why the real reason the implementation of the GST is only to be delayed and implemented in 2015. It is, for sure, not because the government is being generous or being considerate in so doing but rather it is done to enable them to collect a lot more taxes. At the end the GST will then be added to all the new taxes that are being introduced.
    Remember the GST is to be paid by all Malaysians and most important of all for everything. Including the proposed increase of the electricity bill. Please don't forget to add a further 6% of GST in your electricity bill after all that.
    In other words the overall living cost for all Malaysians will go up by a lot more than the proposed 6% that it may appear to be.
    The important question now is, are the Malaysians ready for these increases. Also why are all these increases and new taxes that are implemented necessary to pay for make up for the deficit ?
    Yes, especially when one has to take into account, there is the rate of inflation to take into account, but only to some extend. And not to the total revenues that will be collected are to meet the deficit.
    Finally please remember it is so easy to implement new taxes but it is so hard, for one to keep the collected taxes ! Especially when most of these new taxes are to meet the illegal needs of the Umno warlords ! Best of all how about cutting down or reducing some of unnecessary cost of the expenses ?


  13. Dear Rocky,

    I am a rural resident, an OKU staying far from big city. My meant of comm. is my PC

    I don't bother much about the increase of electricity,


    please reduce the DOWN TIMe !

    Every time the break down mostly take about half a day or at least 4 hours.

    No wonder the bay at our plase call TNB as TAK NAK BERDAYA MAJU.

    Some of them even said TNB are collecting instuments left behind by American in Vietnam before the leave the cuontry.

    KJ and PM please put NKR to this paticular GLC.

    Or please arrange one VVIP to stay in our area.

    We demand the RAKYAT DI DAHULUAKN slgan will be implement to us.

  14. Anonymous said...
    So u agreed this action needed to stabilise the economy... and then who make the economy not stable? Not everybody can be a smart leader but a good leader can come from anybody.


    Dear Anon,
    Nobody on the receiving end who's in the right mind would support a double-digit price increase. Our wages went up 7% in 2009-2012 and that's considered BIG already. Single digit. MyPower should cap the increase to 5% a year over the next three years. That way businesses and mamak restaurants (the 30% affected) has no excuse to pass the buck to consumers or if they do it will in small doses.

  15. Anonymous12:12 pm

    why the 30% ,if they are in business,cannot pass the increased cost down to their customers?are you going to make every item sold a controlled item with prices fixed by the government?like communist central planning economy?of course the 30% who consume more electricity for domestic use have no way to pass the higher tariff to others.don't be so simplistic

  16. Dear MO,

    I agree our Ministers should not be yes men and women all the time, that they should be brave enough to criticise BN government's unpopular and unreasonable proposals and decisions.

    But they must first - and always - get their facts right. In KJ vs TNB's case, I am saying that the Minister has got some of his facts all wrong. When your basic premise is wrong, you tend to make a mess of things.

  17. Anonymous2:37 pm

    Salam Datuk,

    Defination of Economy of Scale from Merriam Webster dictionary.

    'a reduction in the cost of producing something (as a car or a unit of electricity) brought about especially by increased size of production facilities.

    This is the only business entity that defy logic.

    More you pruduced,more expensive.

    Sometimes,without wisdom politician do shoot themselve in the foot.

    When in Rome,do as the Romans do.


  18. Anonymous3:38 pm

    Fadzireen, rather than reading dictionaries, perhaps you should start reading economics textbooks and learn about actual economies of scale, fixed cost, variable cost, marginal cost, etc. haiyo, time sekolah boleh lah kena spoon feed, dah besar ni research la sikit. fess up, do you really understand what the tariff increase is for? google it.

  19. Anonymous8:22 am

    But the people seem to have forgotten that the government has also steadily increased the healthcare operational budget from 9 billion to 22 billion in just 3 years. Someone's got to pay for those expensive medicines and subsidized major surgeries.

  20. Err! How come the energy commission did not ask the IPP to lower down their charges? In the case of YTL, its too late. They have recoup their investments very well and ended up with numerous power plants and utilities the world over.

  21. Anonymous12:10 am

    The 30 % bracket who produce kicap, sos, garam, biskut, roti and all sorts if daily stuff will definately increase their prices to meet the higher tariff. Who will be the victim. Of course the 70% !!!

  22. Anonymous11:11 pm

    how to train umno to manage our them...