THE Energy, Water and Communications Ministry will propose to the Cabinet to stop the construction of two power plants at Prai in Penang and Sepang in Selangor.

Tenaga Nasional Bhd (TNB) wants to redevelop an old power plant in Prai, while Genting Bhd holds the licence to build a coal-fired plant in Sepang.

However, work for these two plants have not started yet.

The Government will also propose to the Cabinet to delay the commission of a coal plant in Tanjung Bin, which is being built by Malakoff Bhd.

This means that the Tanjung Bin plant may have to delay supplying power to TNB.

These proposals are part of a plan to help halve Malaysia’s electricity reserve margin, or spare capacity, to 20 per cent, Energy, Water and Communications Minister Datuk Seri Dr Lim Keng Yaik said.

Spare capacity refers to the power capacity that needs to be available, over and above what is actually used. The current level of 40 per cent is too high and costly for TNB.

Lim said TNB could no longer afford the RM4 billion in “capacity charges” it pays to the nine independent power producers (IPPs), which supplied about 40 per cent of the electricity in the country.

“With more IPPs coming on board, the amount is expected to increase to RM6 billion.”

Lim said IPPs profit tremendously at the expense of TNB. The state utility has been affected to the point where it cannot fulfil its responsibility as a power distributor in the country, he said.

The first-generation IPPs, with 21-year concession agree- ments with TNB, have nine years left.

“They have used up 12 years already and are worried about their future. So with this new proposal to the Government we hope to have enough to last us till 2014,” he added.