The root cause of the problem for TNB investors, consumers and workers are:

1. TNB earns relatively small profit because of the existence of the blood-sucking IPP. The PPA is signed for 20 years, meaning that revising it is as hard as revising the Malaysian Constitution.
2. The writer is right, there is no advantage being a monopoly if you can’t control the price.
3. TNB manages to turn their loss from IPP to profit by reducing their benefits & other expenses for workers, which makes their workers very unhappy and unable to perform to bring more profit for the company.

I would also like to explain the writers criticism on the high-tariff for heavy consumers that discourages them from buying more (e.g. if you buy 1 burger, they charge you RM3, if you buy 2, they have to charge you RM10! WTF.)

The reason is because TNB doesn’t want consumers to buy so much electricity because energy source are scarce and we’ll be running out of fuel faster if we use so much energy. Yes, this will make TNB losing their profit but for the good of the country, TNB wants people to use less electricity. If large industries use too much electricity, TNB has to do ‘load shedding’, meaning they have to ‘blackout’ some areas because they can’t generate sufficient electricity for everyone.

If we read enough about “energy crisis” we will understand why electric utility companies around the world use the same “stupid” business model like TNB that discourages consumers from buying too much of their products. Instead, they reward consumers who buy less, that’s why the tariff is cheaper for those who use less electricity. I repeat, IT IS BECAUSE THE USE OF NON-RENEWABLE FUELS HAS TO BE CONTROLLED BECAUSE THEY ARE SCARCE, THEY’RE GETTING MORE EXPENSIVE AND THEY’RE POLLUTING THE EARTH.

Yours faithfully

Kunta Kinte
Believe in living together.

I like your blog.

To reiterate:
1. The primary reason the government sets the structure to “the more you use, the more you pay” is for energy conservation. We don’t have nuclear power plants in Malaysia. We are burning fossil fuels which are in limited supply. The more of these fossil fuels we use, the less we have in stock. The less we have in stock, the higher the price. If we use too much, then we may not be able to sell and export these fuels at all and our country stands to lose profits especially from oil. Having this kind of policy helps promote energy efficiency, whereby if you use energy efficient equipment, your consumption is lessened but are still able to use more appliances.

2. Tariff for industries – if you have a big factory that has big machines that require for eg, 10 MW demand, then TNB has to install all the equipment that can supply 10MW demand. Then suddenly you wish to upgrade your factory and install more machines reaching up to 12 MW demand. TNB then has to dismantle and install new electrical towers, new switchgears, new transformers, new power lines, new protection relays, new joints, new terminations, new insulators, and so on so that 12 MW can flow through their power line. So you must pay more to have all these equipments installed. Today, you don’t have to worry about all these equipment because TNB will prepare the entire system for you to your meter. TNB thus try to recover their investment in all their equipment from the higher earnings through their tariff structure. It is not as simple as a production line at a factory, whereby if you upgrade your equipment and make 1000 boxes an hour instead of 800 an hour, if the main customer cancels a big order you can always stock your product or sell to another customer. With electricity, firstly you can’t store electricity you produce. Secondly and most importantly, if TNB installed power lines and towers for your factory, they exist only for your factory. They can’t simply move these towers and power lines to another factory when you decide not to use their power supply for a day or two.

Therefore, I very much agree with Ah Yap that TNB is not worth investing in. As long as TNB remains a monopoly, do not invest in TNB, for reasons as Ah Yap mentioned and will be repeated by me : As long as TNB is a monopoly, they can’t control the price of their product. Once TNB ceases to be a monopoly, it will then be very attractive as TNB will be able to structure their sales quantity to take control of their business.

its a CI link stock .. so .. no need to say its bad … if its bad ..
ASB woudnt even look at it …

dun make comments just by reading annual report … it makes u look very “GOOD” .. agahahahaaa .. :p

if stock valuation is as easy as reading annual report …
then there is no need for CFA n so on … auntie uncle also can read annual report …

only an opinion … after all im just a kid …

I dunt agree with this comment… TNB does charge more on companies who use higher power .. TNB basically charge on total consumption (KWhr) and max demand (KVA)… usually big customers means the ppl who hv high max demand.. when they hv high max demand TNB needs to invest more on higher rated equipments to provide it. So its only logical for TNB to charge them more..

If u were providing power to 10 companies at max demand of 10 kw, suddenly a company comes in and uses a max demand of 12 kw… Being a GLC u hv the responsibility to provided it to him.. so u invest money on equiptments for him and provided it to him and u dunt charge him extra. Now thats a bad business model lolx.

You might argue that its an investment and there is a chance of making money from this company in the long term. But wat if more companies come in and ask for 14 ,18, or 20 Kw of max demand. Gulung tikar la then and say bye bye to gas resources also lolx. Indirectly TNB is making companies reduce their max demand, power consumption rates (KWhr) does reduce as usage increases but max demand(KVA) usage is vice versa.