Electricity tariffs likely to be maintained

The electricity tariff for the second half of the year is slated to be announced in the next few days.

PETALING JAYA: Government-linked companies have come under the spotlight, with the Government saying there is a need to review their role. However, as far as the energy sector is concerned, analysts believe that the Government is committed to carrying out reforms, boding well for Tenaga Nasional Bhd (TNB).

According to UOB Kay Hian, a regulatory meeting reaffirmed its view that the Government is committed to carrying out energy reforms, including the gas subsidy rationalisation programme. As such, it believes the government will continue to subscribe to the incentive-based regulation, which promotes asset efficiency. The research house noted that the market has underestimated the potential size of stabilisation funds (which include existing funds from TNB generator and independent power producer contributors) to be made available to the government to maintain the imbalance cost pass-through (ICPT) surcharges in the next three years, assuming coal and gas prices continue to rise.