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No base electricity tariff hike until end-2024, but 3.7 sen/kWh surcharge on non-domestic users in 1H22

KUALA LUMPUR (Jan 28 2022): The government is keeping the current base electricity tariff for all electricity users in Peninsular Malaysia throughout the Regulatory Period 3 (RP3) from Feb 1, 2022 to Dec 31, 2024, said the Energy Commission (EC).

However, the government will impose an electricity tariff surcharge of 3.7 sen per kilowatt hour (kWh) for non-domestic users for the February to June 2022 period, while maintaining a two sen rebate for domestic users, the EC said in a statement.

The surcharge, imposed under the Imbalance Cost Pass-Through (ICPT) mechanism, was on the back of an increase in fuel costs of RM1.67 billion from July to December 2021, as coal prices touched US$200 (RM838) per tonne in the period, it said.

“The sharp rise in coal prices in the market resulted in power generation costs rising by 45%, and caused a big impact on electricity tariff in the peninsula as coal makes up 59% of power generation fuel source.

“The rise in coal prices is out of the government’s control as it is based on global prices,” the EC explained.

In the previous ICPT cycle of July to December 2021, Malaysia has imposed an ICPT rebate of two sen per kWh for domestic customers, and the same rebate of two sen per kWh for non-domestic customers namely commercial, industrial and others.

With the RP3 decision, the average base electricity tariff remains at 39.45 sen per kWh.

For the purpose of maintaining the current rebate for domestic users, the government has allocated RM715 million from Kumpulan Wang Industry Electric (KWIE) fund, the EC added.

In light of the latest decision on the base tariff, Tenaga Nasional Bhd (TNB), in a Bursa Malaysia filing, said it will continue to focus on maintaining the service level and ensure reliable and continuous supply of electricity to customers.

“TNB also wishes to inform that the impact of the ICPT implementation, based on the Regulatory Implementation Guidelines, is neutral on TNB and will not have any effect on the business operations and financial positions,” said the utility giant.

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Author: jameschong

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