Spotlight on Sarawak electricity - Anil Netto

The federal government reimburses the Sarawak power supply corporation about RM1.4 million a month so that about 70,000 households in Sarawak can enjoy free power supply, reports the Borneo Post.

Sounds good?

Let’s take a closer look at Sarawak Energy Bhd, which is 65 per cent owned by the State Financial Secretary Sarawak (which falls under the finance minister, who is Chief Minister Taib Mahmud) and 4 per cent by EPF:

Financial year ended 31 Dec 2008

Turnover RM1.3 billion

Profit before tax RM293m (RM401m in 2007)

Directors’ fees, etc RM3.8m (RM2.3m in 2007)

Now, let’s compare that with Tenaga Nasional Bhd, which was 38 per cent owned by Khazanah and 14 per cent by the EPF:

Financial year ended 31 Aug 2008

Turnover RM25.8 billion

Profit before tax/zakat RM3.0 billion (RM4.8b in 2007)

Directors’ fees, etc RM2.3m (RM1.8m in 2007)

Notice anything?

Planning and Resource Management Second Minister Awang Tengah claims that Sarawak enjoys lower electricity tariffs compared to other states and neighbouring countries.

In a study by Tenaga National Bhd (TNB) on 10 utilities companies, the average tariff for the peninsula was 32 sen per kilowatt-hour (kwh), while in Sarawak it was 29 sen per kwh.

“I’m talking about average, so overall, we’re still lower than the peninsula,” he stressed.

Yes, of course, he is talking about the “average” tariff of various categories of consumers: domestic, commercial, industrial, public and street lighting.

But what about domestic users alone? For your homework today(!), calculate a domestic user’s bill if she consumes:

- 500 units of electricity in Sarawak (look up SEB tariffs here.)

- 500 units of electricity in the peninsula (look up TNB tariffs here.)

Go on, work it out.

Done?

If domestic tariffs in Sarawak are higher than the peninsula’s and if Sarawak’s average tariff is still lower than the peninsula’s as Awang Tengah claims, logically it follows that commercial/industrial/other tariffs are lower in Sarawak. A cursory comparison of the industrial tariffs imposed by SEB and TNB suggests that this could be the case.

If this is true, does it mean that domestic users in Sarawak are partially subsidising other users (industrial, commercial, etc)?