Thursday, June 08, 2006

What can we expect from Electricity Review

Title: What can we expect from Electricity Review?
That the vertical structure from power producer, distribution/power line company, and retail market would be better carved up. Corporations could be set up to produce power, just like what current IPP is doing now. These power producers, would sell their power generation in an electricity market whereby retail power companies would buy them to sell to ordinary power consumers, companies that uses electricity and ordinary people. Transmission and distribution company, the middleman in the electricity market charge a certain amount per kwh to the final electricity user and a fixed supply charges, for the cost of power infrastructure like power lines.
TNB as a national transmission and distribution company could be carved up into smaller companies, say TNB One as a national transmission company and smaller distribution retail companies in every States. One for Kedah and Perlis, another for Pulau Pinang etc.
Retail power companies and large power users can bid for the lowest price electricity on offer in the electricity market. The electricity market is open for business 24 hours a day, 7 days a week. It so happen that power consumers uses less power in the middle of the night and the wee hours of the morning, so power at these times should be cheaper if the market is efficient. Retail power companies could install dual electricity meters to household, meters that recognise consumption say between midnight and 5am. Then consumption at these hours could be charged at lower rate.
The unfair agreement between TNB and IPPs could be declared null and void by law. Now IPPs will have to sell to retail electricity companies in the electricity market that has been set up. If big electricity users like Perwaja want to buy electricity in the market, they could. IPPs could also sell electricity to neighbouring countries, provided there are transmission lines and they are willing to buy.
As for current unfair agreement between TNB and IPPs, I would suggest that TNB seek redress in court. From newsmedia report for the past few days, Tan Sri Ani Arope said that the agreement between TNB and IPP were made under DURESS. TNB was not allowed to negotiate on the price of electricity it paid. There are cases in commercial law whereby the aggrieved party can seek redress, if it can be proven that the agreement was made under duress and unfair.
Noor Yahaya Hamzah

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