Tenaga Nasional Berhad
|"If you get from the people because of your position, that is bribery. Would you get it if you are not holding that position, or if you stay in your father's house?" — Prophet Muhammad.|
From Malaysia Factbook
Tenaga Nasional was formed in 1990 as a result of the privatization of the National Electricity Board (NEB) of the States of Malaya. Its core activities are in the generation, transmission and distribution of electricity. With assets worth RM69.8 billion, it is the largest electric utility company in Malaysia and also the largest power company in Southeast Asia. Tenaga Nasional serves over 7 million customers throughout Peninsular Malaysia and also the eastern state of Sabah through Sabah Electricity Sdn Bhd.
Tenaga Nasional operates in a regulated environment that still faces several unresolved structural issues. Its long-fought for tariff pass-through formula which would have enabled it to pass the cost burden of higher fuel to consumers has been in vain to date. Yet despite having strengthened its financial and operational platforms, Tenaga Nasional is today battle-scarred and has failed to attract the degree of investor attention it deserves, as a result of such regulatory uncertainty.
| Tenaga Nasional Berhad - Tan Sri Leo Moggie|
(Uploaded by AsianPowerMagazine on 8 May 2011)
2. Scope of activities: Apart from its core activities of generating, transmitting, and distributing electricity, it also carries out other activities such as:
- repairing, testing and maintaining power plants;
- providing engineering, procurement and construction services for power plants related products;
- assembling and manufacturing high voltage switchgears;
- coal mining and trading.
Operations are carried out not only in Malaysia, but also in Indonesia, Mauritius, India and Pakistan.
Through its subsidiaries, Tenaga Nasional is also involved in:
- manufacturing of transformers, high voltage switchgears and cables;
- consultancy services;
- architectural, civil, and electrical engineering works and services;
- repair and maintenance services;
- research and development;
- property development and project management services.
Through Universiti Tenaga Nasional (Uniten), Tenaga Nasional also offers higher education.
3. Divisions: Tenaga Nasional has 3 divisions:
- Generation Division: This Division owns and operates thermal assets and hydroelectric generation schemes in Peninsular Malaysia, as well as an Independent Power Producer (IPP) in Pakistan. Among plans to expand its generation capacity include:
- Transmission Division: Currently, Tenaga Nasional has a complete power supply system, including the National Grid which is energized at 132, 275, and 500 kV. Its tallest electricity pylon, Kerinchi Pylon, located near Menara Telekom, Kerinchi, Kuala Lumpur, is also the tallest in Southeast Asia. The National Grid is linked to both Thailand and Singapore.
- Distribution Division: This Division conducts Tenaga Nasional's distribution network and electricity retail operations. It plans, constructs, operates, and performs repairs and maintenance, as well as manages Tenaga Nasional's assets in the Peninsular Malaysia distribution network. Sabah Electricity Sdn Bhd provides the same function in the state of Sabah.
- The Distribution Division operates a network of state and area offices to:
- purchase electricity from embedded generators, market, and sell electricity;
- connect new supply;
- provide counter services and collect revenues;
- operate call management centers;
- provide supply restoration services; and
- implement customer and government relationships.
4. TNB's power purchase agreements (PPAs): On 16 October 2013, Transparency International Malaysia (TI-M) president Datuk Akhbar Satar said that a Royal Commission of Inquiry should be set up to investigate TNB's power purchase agreements (PPAs) to ascertain if there is any element of embezzlement. It said that doubts about the transparency of the PPAs had emerged, following revelations made by former TNB chief executive, Tan Sri Ani Arope, that former Prime Minister Tun Dr. Mahathir Mohamad had been responsible for the signing of the agreements. "During his time as prime minister, Dr. Mahathir was also the head of the Economic Planning Unit and was alleged to be the decision-maker in the PPAs signed by TNB. This was revealed by Ani in his latest book, Memoirs of Tan Sri Ani Anope", he said. Akhbar said that although Ani did not specifically mention corruption in his memoirs, but the contents of the book reflected the lack of transparency in the terms and conditions of the PPAs.
Akhbar also pointed out that the high rates that TNB charged consumers was questionable, as the government also paid subsidies to the energy provider. He added that over the past 20 years, TNB had raised electricity tariffs several times, although market forces meant that rates could have been reduced to a comfortable level, adding there was no logical reason why homeowners should be forced to pay more for their electricity. "TNB produces energy at RM0.08 per unit (kwh) but independent power producers are paid as much as RM0.23 per unit, which is a 300% increase," Akhbar said, adding that the first PPA which had been signed in 1994 would end in September 2015.
Akhbar urged Putrajaya to scrutinize the PPA in a clear and transparent manner. Akhbar even suggested that the government should work together with Pakatan Rakyat to get the opposition's input and suggestion to solve the problem of high electricity bills. (Pakatan Rakyat has estimated that the total corporate subsidy given by the government was almost on par with the reduction of petrol and diesel subsidies, amounting to RM14.8 billion which was announced by Prime Minister Najib Tun Razak recently.) Akhbar said that there was not a single analysis which could explain the extraordinary economic decision of TNB paying a huge amount for energy when they could produce it at one-third of what they are presently paying.
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