Thursday, January 27, 2005

TNB is liable for losses caused by blackout

Excerpt from TheStar


PUTRAJAYA: Tenaga Nasional Berhad is liable under the law for the loss suffered by consumers due to the Jan 13 blackout, said Energy, Water and Communications Minister Datuk Seri Dr Lim Keng Yaik.

Dr Lim said the Electricity Supply Act 1990 clearly states that the utility company can be held responsible for the loss suffered by consumers.

However, TNB chairman Datuk Leo Moggie said the preliminary reports submitted to the Cabinet showed that the power utility company was not liable.

The Cabinet yesterday was presented with preliminary reports by three sources – TNB, the Energy Commission and a consultant appointed by the national utility company – on the incident that affected three million consumers in five states.

The reports, Dr Lim said, identified a gas leak at the P10 circuit breaker at the Port Klang switchyard followed by a decision to switch it off which then resulted in tripping.

However, he said, the question remained whether TNB could have taken different measures to tackle the problem without causing a massive outage.

He added that the Cabinet at its meeting deferred the decision on the issue of rebates and ordered the Energy Commission to carry out further investigation into the incident.

Speaking to reporters, Dr Lim said Prime Minister Datuk Seri Abdullah Ahmad Badawi had directed the commission to identify whether the incident was a direct result of a faulty decision by TNB staff or due to a faulty operations system before a decision on rebates was made.

The commission, he said, had been given two weeks to carry out the investigation.

However, he said, this was just a matter of being thorough and transparent to ensure that consumer confidence in the country’s electricity supply remained strong.

The fact that TNB was at fault and must bear responsibility for the outcome of the incident, he said, was not in dispute at all.

“The Prime Minister wants no hint of any cover-up to crop up later. That is why he directed me to get down to the bottom of this incident and not to hide anything at all,” he added.

Dr Lim said that under Section 37(2) of the Electricity Supply Act 1990, anyone who makes a faulty decision resulting in damage to property or welfare of consumers can be fined up to RM15,000 or jailed three years, while under Section 17(3) of the same Act, a licensed electricity supplier can be held responsible for any damage to property or welfare of consumers if disruption to supply is due to negligence or a faulty system.

In this case, he said, TNB had more than four hours to decide on the best course of action but instead took a decision that ultimately caused so many problems and losses to millions of consumers.

TNB chief executive officer and president Datuk Che Khalib Mohd Noh said last Thursday that TNB had restored power supply within the stipulated period set by the Energy Commission.

Thus, it would not be compensating consumers for the outage.

Dr Lim said the argument used by TNB was only applicable for normal power disruption and was not applicable to an outage that affected millions of consumers.

TNB offered a 10% rebate to consumers affected by a blackout in August 1996, while consumers in Penang enjoyed a 20% rebate during an island-wide blackout in 1995.

Moggie, when speaking to reporters after announcing TNB’s quarterly financial results at TNB headquarters yesterday, said they would wait for the outcome of the detailed report.

“We cannot prejudge what the detailed report will say. We will wait for it. I don’t want to continue with this debate.”

Asked why TNB was unwilling to pay compensation to consumers since it registered a net profit of RM8.5mil for the first quarter ending on Nov 30 last year, he said: “The profit is not substantial. If we record losses, the public will be disappointed with us.”

On why the national utility company paid compensation to consumers during the 1996 power outage, Moggie said: “It was given voluntarily by the company then. Now we have decided not to give out rebates to consumers.”


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