The Energy Regulation and Markets Review - Stikeman Elliott

Malaysia
Yang DiPertuaNegeri. Thus, any company seeking to either undertake the generation,
transmission or distribution of electricity would have to obtain a licence from the state.
Any tariff charged by the licensee must be approved by the state government.
The Electricity Ordinance also stipulates that the Minister may also set out a maximum
price for the reselling of energy by a licensee to consumers. Apart from the foregoing,
the Electricity Ordinance sets out provisions on the requirements of competent person
to operate electrical installations and stipulates the duties and obligations incumbent on
licensees.
iii Ownership and market access restrictions
Malaysia
At the time of writing, only TNB has been awarded transmission and distribution
licences for the whole of Malaysia except for the states of Sabah and Sarawak. 2 The
government and Energy Commission have, however, awarded the generation licences to
a number of independent power-producing companies other than TNB.
For the state of Sabah, Syarikat Electricity Sdn Bhd (‘the SESB’) is the sole
transmission and distribution licence holder. Similar to peninsular Malaysia, generating
licences have been awarded to SESB and a few other independent power-producing
companies.
There is no restriction in law restricting the ownership of the licences; however,
approvals normally contain restrictions on ownership pertaining to Malaysian and
bumiputera shareholdings.
Sarawak
The sole transmission and distribution licence in Sarawak is granted to Syarikat Sesco
Berhad (referred to as ‘SESCO’) which is the privatised entity of Sarawak Electricity
Supply Corporation. It is a wholly owned subsidiary of Sarawak Energy Berhad (referred
to as ‘SEB’) which is owned in majority by the Sarawak state government. The generating
licenses have been granted to SESCO and subsidiaries of SEB.
iv Transfers of control and assignments
Under the ESA in Malaysia, licences cannot be transferred without the approval of the
Minister. Under the Ordinance in Sarawak, licences cannot be assigned or transferred in
any manner without the approval of the state government.
III
TRANSMISSION/TRANSPORTATION and DISTRIBUTION
SERVICES
The transmission and distribution network in Malaysia has not been unbundled and
in essence can be divided into three parts. One is peninsular Malaysia’s distribution
2 Distribution licences are awarded by the Energy Commission in peninsular Malaysia for the
supply of electricity within a private area or within a franchise area such as within a port or
industrial area.
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