State-owned Sarawak Electric Supply Corporation, a subsidiary of Sarawak’s sole electricity provider Sarawak Energy Bhd (SEB) signed the Power Purchase Agreement (PPA) with Sarawak Hidro Sdn Bhd, a unit of the Ministry of Finance Incorporated and owner of the Bakun Dam.
Under the PPA, Sarawak’s SESCO will purchase power from Bakun at 6.25 sen/kWhr with an annual hike of 1.5 per cent.
The power will be used exclusively to power up Sarawak’s energy intensive industries under the Sarawak Corridor of Renewable Energy (Score).
The Malaysian Insider understands the PPA decision was made after the April 16 Sarawak election when Tan Sri Abdul Taib Mahmud swept to victory but did not give a date as to when he plans to step down as chief minister, much to the dismay of Barisan Nasional (BN) leaders across the South China Sea who feel new blood is needed in the Land of the Hornbills.
“Putrajaya has decided to keep Bakun but sell the power to Sarawak first before deciding other options,” a source told The Malaysian Insider.
The government announced on Monday a 7.12 per cent hike in electricity rates from June 1 by Tenaga Nasional Berhad (TNB) in an effort to trim its burgeoning subsidy bill, but promised the hike will not affect some 75 per cent of domestic consumers.
Power prices will now rise by as much as 2.3 sen per kilowatt hour in areas taking Tenaga’s electricity supply.
Officials said natural gas prices would also rise by RM3 per mmBtu every six months until it reaches market levels. The government said it will still spend some RM25 billion to subsidise the gas bill this year.
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