As consumers, we all do agree that the cost of fossil fuel is ever increasing due to its finite availability. In addition to that, the efficiency of the energy industry - structurally, economically and operationally - plays a vital role as well.

In the distorted decision-making process for power tariffs in Malaysia, we will always see many parties creating chaos and confusion. The basic thing that needs to be done here is a merger of all energy-related sectors into one agency.

This will clearly ensure a single agency which will take up this responsibility. This must be a top priority to ensure ‘energy security’ in Malaysia. Sabah and Sarawak should also be included in this process.

Secondly, the auditor-general must audit all stakeholders, Tenaga Nasional and the Independent Power Producers (IPPs). This audit process must be done for every tariff review and the results should be announced to the public. This will ensure that the industry keeps itself efficient and the public kept in the loop of the energy tariff review process.

Thirdly, legislation must be enhanced and merged to ensure public interests and market interests are protected. When we see the example of the Suruhanjaya Perkhidmatan Air Negara, we see it has a clear process of tariff review while the energy sector fails to have one.

This process will also ensure fair agreements are allowed with reasonable capital expenditure (Capex) and operational expenditure (Opex). Regulation of technical and economical performance is vital for the survival of the industry as it is the backbone of the nation.

Fourthly, reserve margins should be reasonably adjusted from 25% to 30%. This will also serve as a call to retire inefficient plants as well as to allow reinvestment to boost efficiency. The current reserve margin is higher than 50% and will increase wastage.

This wastage is eventually passed to the consumers as tariffs. While we are always keen to ‘copy’ foreign models, we need to ensure its applicability locally.

Finally, the first batch of the Power Purchase Agreement (PPA) will end soon. This is an opportunity for the government to rectify earlier ‘mishaps’.

Industries will not do a business without profit but their ability to make profits should not be the worry of government agencies. Their worry should be in ensuring fair prices and protecting public interests.

Malaysia will soon be net importer of fossil fuel with current rate of consumption. It is high time that the government agencies work to merge and protect the nation’s growth and the rakyat.

The writer is secretary-general, Water and Energy Consumers Association of Malaysia (Wecam).