Sunday, September 19

Reduction in commercial and industrial electricity tariffs starting June 1, 2015

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Adenan (centre), flanked by Awang Tengah (left) and Entri, speaks to the media in his office at the State Legislative Assembly complex.

KUCHING: Effectively June 1 this year, the state government will reduce the commercial and industrial electricity tariffs by eight to 50 per cent and four to 40 per cent respectively.

The announcement by Chief Minister Datuk Patinggi Tan Sri Adenan Satem is expected to benefit about 86,000 businesses in the state.

“This is meant to assist the business community in Sarawak especially the smaller players, in the face of rising cost of operation,” Adenan told a press conference soon after his delivering winding-up speech yesterday.

He hoped that with the reduction of tariffs the benefits would go to the consumers.

Adenan, who is also Minister of Finance, said in the case of the goods and services tax (GST), the state had no say over it except that “this exercise (reduction of tariffs) is what the state can do to ease the people’s burden”.

“The reduction in commercial and industrial tariffs is made possible with the timely commissioning of Murum HEP by Sarawak Energy Bhd (SEB) this year.

“This low generation cost of hydropower is now enjoyed by the people of Sarawak across all sectors. This is going to be the key driver that will propel the state towards our vision of a high income economy by 2030,” said Adenan.

Following the domestic tariffs reduction implemented earlier this year, about 130,000 low income consumers are now enjoying zero monthly bills.

In total, 240,000 domestic customers or close to 50 per cent of SEB consumers are enjoying a tariff reduction of between 20 and 40 per cent.

“Today’s announcement on the revision in commercial and industrial tariffs will bring further joy to all Sarawakians,” he said, adding that Sarawakians had been enjoying one of the lowest tariffs in the region for the last 20 years, thanks to hydropower.

Adenan, who is also Minister of Resource Planning and Environment, said the state had been able to reduce the tariffs due to the RM100 million-royalty collected from Batang Ai, Bakun and Murum HEPs this year.

He said that the revised structure provided much assistance to small and medium-sized (SME) businesses.

For commercial tariff: C1 (shophouses, retail shops, commercial blocks etc). Under this category, more than 50 per cent or approximately 46,000 consumers will enjoy a reduction of 15 to 50 per cent and another 36 per cent or more than 30,000 consumers will enjoy eight to 11 per cent reduction.

“To summarise, about 90 per cent of consumers will enjoy a tariff reduction ranging from eight to 50 per cent,” said Adenan.

“Secondly, for commercial tariff (C2 and C3, i.e shopping malls, building and construction, ports, oil and gas etc), all C2 and C3 customers will enjoy a reduction of 50 sen per kWh, which translates to an average saving of about two per cent.”

For industrial tariffs, I1 category which includes flour mills, food and beverage factories and etc., the revised structure and rates will result in four to 40 per cent reduction in tariff.

“In comparison to Peninsular Malaysia, factories consuming at this level will be paying 61 per cent more. And in comparison to Sabah, factories consuming at this level will be paying 40 per cent higher,” said Adenan.

Under I2 and I3 categories which involve quarries, timber companies, oil and gas, steel mills, clinker, tiles, electronics and etc, all consumers under these two categories will enjoy a reduction of 50 sen per kWh which translates to an average savings of 2 per cent.

“For instance, an electronic factory consuming 400,000 kwh currently pays RM105,000 per month. With the revised tariff, it will enjoy an annual saving of RM24,000.”

He also said that in comparison to Peninsular Malaysia, factories consuming at this level would be paying 50 per cent more and in comparison to Sabah, factories consuming at this level would be paying 22 per cent more.

“The revised tariff structure for the domestic, commercial and industrial sectors is an element of direct assistance given to the people by the state to cushion the rising cost of living and the cost of doing business in Sarawak.

“This is one of incentives for the setting up of more businesses in the state and I believe, when combined with other initiatives from the government, it will grow Sarawak’s potential to become the business hub in the region,” added Adenan.

Minister of Public Utilities Datuk Amar Awang Tengah Ali Hassan and Assistant Minister of Public Utilities (Water Supply) Datuk Sylvester Entri were also present at the press conference.