Who benefits from our tariff structure?

Ahmad Faiz Abdul Razak

Modified 11 Jan 2010, 11:31 am

The issue of misplaced subsidies has been around for a long time in Malaysian society. The imbalanced electricity tariff is but one example.

According to Tenaga Nasional Berhad's (TNB) website, domestic users like you and me pay RM 0.218 for every kilowatt hour (kWh) for the first 200 kWh. However,  the tariff which is given to `special' industrial consumers (E2s), the price is as low as RM 0.147/kWj for off-peak consumption.

This means that the tariff enjoyed by huge electrical energy gulpers is cheaper for every kWh than it is for the thousands of farm villages across the country.

I would also like to question the `special’ status which is granted by the Ministry of International Trade and Industry (MITI) to industrial consumers. According to TNB, this status is given to industrial consumers that have electricity bills that are five percent or more of the actual operating cost per annum.

In my opinion, this will encourage wastage of energy, as it is cheaper to waste than to conserve and practice energy efficiency.

Admittedly, the development of the industrial sector is a key ingredients towards the prosperity of the country.

But the current practice clearly is unsustainable.  Do not forget that we have a responsibility to the future generations. They also have the right to benefit from the usage of the energy that we enjoy today.

It would make more sense to reward those consumers who use less energy rather than those who strain the country’s electricity generating capacity. Thus, it will directly and indirectly conserve electricity and delay the exhaustion of our fuel.

Sustainable development of renewable energy (RE) should be encouraged. Malaysia has yet to maximize its potential in this regard.

High initial costs, lack of encouragement from the government and the ever-existing problem of energy storage have been and will always be stumbling blocks to RE development. If RE is developed vigorously and sustainably, we would not have to switch to nuclear energy, which may be harmful not only to humans, but to the environment as a whole.

Consumers need also to be alert about these issues so that their rights can be protected. The government, NGOs and the private sector need to synchronize their energy and resources so that this issue can be dealt with in a sustainable manner.

The writer is an executive engineer with the Water and Energy Consumer Association Malaysia (WECAM)