LITTLE-KNOWN private special-purpose unit MyPower Corp is set to gain more attention now that it has been tasked to review the country's power-purchase agreements (PPAs) between Tenaga Nasional Bhd (TNB) and independent power producers (IPPs).

The unit, which is currently parked under the Energy, Green Technology and Water Ministry, was set up a year ago but has been on a relatively low profile until recently when StarBiz reported that it had been mandated with such an important responsibility. MyPower is currently headed by Datuk Abdul Razak Majid, a veteran in the power sector who was formerly TNB's senior vice-president of corporate affairs.

“MyPower is basically helping the ministry to look into issues relating to the future of the power industry in Malaysia. It is also helping in facilitating any conservation with IPPs as well as other duties assigned,” Energy, Green Technology and Water Minister Datuk Seri Peter Chin told StarBiz when contacted.

Abdul Razak: Heads MyPower, which may change the landscape of the power industry.

In late May, Chin said the ministry was being assisted by MyPower and the Energy Commission (EC) to implement several changes in the country's electricity supply sector as identified by state-owned investment fund Khazanah Nasional Bhd in a research on the need for reforms in the energy sector completed in 2009.

“These changes are needed for a vibrant energy sector,” Chin had said.

Analysts said “little information has trickled down about the MyPower task” but nevertheless it's a positive sign for the power supply industry.

They said MyPower was a one step up for the renegotiation for the much-criticised PPAs with IPPs.

“We view the setting up of this special-purpose unit positively, as it signals that the IPP re-negotiation is gaining momentum,” ECM Libra said.

“The main thing is ensuring that future PPAs should be done on a competitive basis and ensuring the renewal of PPAs is also done on a competitive basis I guess,” an analyst said when asked what should MyPower be doing.

Analysts said it would be interesting to note if the setting up of MyPower would lead to a deregulation of the power industry as this would change the landscape.

OSK Research head Chris Eng opined that MyPower had a bigger implication on the industry given what he called the unit's rumoured tagging as a market operator.

“The fact that the unit is headed by Abdul Razak is also a poignant detail,” he said

MyPower is basically helping the ministry to look into issues relating to the future of the power industry in Malaysia. It is also helping in facilitating any conservation with IPPs as well as other duties assigned. — Datuk Seri Peter Chin

“Back in 2000 when there were plans to deregulate the Malaysian power industry, Abdul Razak was tasked with the setting up of market operator the Independent Grid System Operator, which would handle the dispatch of power plants in a deregulated electricity market,” he added.

However, Eng said deregulation of the country's electricity industry was “unlikely to happen in the short term.”

The longer-term implication may see TNB being broken up, with its transmission business extracted and operated by the Government while its generation and distribution business may have to compete with new distribution players (potentially existing IPPs), which should get to sell electricity to large consumers as well.

MyPower's task involves restructuring the legal and regulatory framework of the industry to be more equitable, competitive, liberalised and provide a level playing field.

It will also be looking into moving the industry towards a cost-based structure.

At present, there is scarce information about MyPower and searches on the official ministry website provided little information. MyPower said it did not have any statement to release to the press as yet while the ministry has yet to revert to StarBiz queries at press time.

Last week, the ministry's deputy secretary general, Badaruddin Mahyuddin, said MyPower, a government-guaranteed company, would conduct a study on the local electricity industry from nine aspects, including governance issue, as electricity was currently handled by various ministries.

“Part of its (MyPower) task is to review and discuss the contents of the PPAs and come up with suggestions for both TNB and IPPs. Before submitting these recommendations to the three ministries Energy, Green Technology and Water Ministry, Prime Minister's Office and Finance Ministry the unit will jointly discuss them with the EC,” Badaruddin said.