IN an effort to strike a balance between affordable tariffs for low-income groups and economic growth, Tenaga Nasional Bhd (TNB) has expressed its support for the implementation of targeted subsidies.

The aim is to alleviate cost burdens on struggling households while ensuring the country’s economic progress, TNB Chairman Datuk Abdul Razak Abdul Majid said in a press release today.

Recognizing the impact of rising inflation on both households and businesses, he said the government introduced a targeted electricity subsidy scheme in late 2022.

Under this scheme, domestic users continue to enjoy tariff rebates on their electricity bills, while a select group of small businesses and industries have been spared from tariff surcharges.

“As a caring corporate entity, TNB understands the need to assist low-income groups in Malaysia as they face mounting cost pressures. We will continue to support the government’s efforts to manage tariffs through the Imbalance Cost Pass Through (ICPT) mechanism, striking a balance between affordable tariffs for the rakyat and economic growth,” said Abdul Razak during TNB’s 33rd annual general meeting today.

Amidst Malaysia’s buoyant economic recovery and the surging fuel prices witnessed since 2022, he said TNB remains committed to meeting the energy needs of industrial, commercial, and residential customers.

Additionally, Abdul Razak said the national utility company aims to steer Malaysia toward a responsible energy transition.

“The significant investments we made over the years to diversify energy sources as well as grow our renewable energy portfolio enabled us to continue providing sustainable and reliable energy.

“Our efforts were recognised by our customers as shown by consistent performance for two consecutive years in our Customer Satisfaction Index scores of 87% in 2022,” he said.

Meanwhile, TNB president and CEO Datuk Indera Baharin Din highlighted the global energy crisis of the previous year, which saw coal and gas prices reach multi-year highs with an 83% and 11% year-on-year increase, respectively.

He said Malaysia was not spared from the impact of higher fuel prices, which significantly influenced electricity generation costs.

Baharin emphasised that despite the challenges posed by the energy crisis, TNB remains committed to accelerating the adoption of a cleaner generation mix by 2050, reducing the heavy reliance on fossil fuel sources that account for over 70% of generation costs in Peninsular Malaysia.

“Nonetheless, we have fulfilled our obligations by ensuring a reliable, secure, and affordable power supply to the nation,” he said.

To address the increased fuel costs, Baharin said TNB has been collaborating with the government through the implementation of the ICPT mechanism.

This mechanism includes subsidies provided by the government to offset the higher fuel costs associated with electricity generation.

He noted that TNB’s prudent working capital management has also played a role in alleviating the pressure caused by high fuel prices.

Operationally, Baharin said TNB has maintained world-class standards, with power plants achieving an availability factor of 83.2%.

The Transmission System Minutes, a benchmark measuring the duration of interruptions caused by transmission, were at a mere 0.2 minutes in 2022, while the the System Average Interruption Duration Index (SAIDI) stood at 45.1 minutes.

Baharin commended TNB’s workforce for their efforts in operating and maintaining the electricity supply infrastructure to the highest standards.

In 2022, TNB solidified its path towards becoming a leading provider of sustainable energy solutions in Malaysia and internationally by unveiling the TNB Energy Transition (ET) Plan.

“As part of our commitment to the ET Plan and driving Malaysia’s energy transition, TNB will allocate significant capital expenditure to fast-track our journey to achieving net-zero emissions by 2050.

“Ultimately, we have an eye on the longer-term future of TNB and these investments will gradually shift our existing portfolios to greener ones, for more sustainable business growth of TNB while creating long-term value for shareholders,” he said. – TMR