BATU KAWAN – Tariff hikes by Tenaga Nasional Bhd (TNB) may threaten the profit margins of Penang Water Supply Corporation Sdn Bhd (PBAPP) because of increased operation costs, said Penang Chief Minister Chow Kon Yeow.
Chow, who is also the PBAPP board chairman, said if the tariff hike is unsubsidised, PBAPP may have its profit margin wiped out.
The water supply body already has challenges such as uncertainty of water resources due to a combination of factors, from climate change and a high wastage rate to disputes with neighbouring Kedah and Perak over raw water supply, Chow noted.
“PBAPP is the most profitable water supply company in the country, but events of late, including the tariff hike, are now threatening its position to be profitable,” he said at a press conference after the launch of a solar PV system at Design Village Outlet Mall here, last night.
If the water authority’s profits only used to just maintain operations, it will be difficult to expand the much-needed capital investment for the company, Chow said.
He said PBAPP needs to pour in investments for new infrastructure while also securing reliable water supply sources.
An increase in electricity costs without subsidies will see PBAPP dig into its own coffers as any increase in water tariffs will need approval from the National Water Services Commission, Chow also said.
This makes the need to push for renewable energy such as solar power urgent, said Chow.
Natural Resources, Environment, and Climate Change Minister Nik Nazmi Nik Ahmad recently said that the electricity tariff hikes for July to December this year will not affect 99% of domestic users except for the very rich.
However, even with the tariff hike, the minister also said there would be lower surcharges for certain types of industrial users.
Water utility and treatment operators will enjoy a lower surcharge from 20 sen per kWh to 3.7 sen per kWh, Nik Nazmi had said, so that operators will be able to continue providing clean, treated water to consumers.
Nevertheless, Chow said the private sector can help with the push to renewable energy in view of higher electricity tariffs.
He proposed that solar power be used to mitigate some of these rising costs, such as what Design Village is doing.
“The take-up rate (for renewable energy) has been low in recent years, but now we see more interest. Renewable energy is the way forward in terms of saving energy consumption costs.”
PE Land Penang, the owner and operator of Design Village, said it is excited to be part of the renewable energy initiative because of the savings it can earn.
Its chief operating officer Andy Soong said the solar PV system installed will meet 30% of the mall’s power needs.
It is also enough to power up to some 600 households in Penang, said Soong. – The Vibes, June 26, 2023
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