The fund has utilised around RM1.3b to support the ICPT

By AFIQ AZIZ / Pic By HUSSEIN SHAHARUDDIN

The electricity rebate embedded in the imbalance cost pass-through (ICPT) mechanism is not subsidised by the government but the cost is supported by the establishment of the Electricity Industry Fund (EIF).

Energy Commission (EC) acting CEO Azhar Omar said the fund, since it began operation last April, has collected around RM1.6 billion from the first independent power plant (IPP) deal.

The fund has utilised around RM1.3 billion to support the ICPT.

“The fund is generated by re-negotiation of the first IPP generation, where we found there is some discounts from what that should be paid by Tenaga Nasional Bhd (TNB) (to the IPP operator),” he said in a media briefing at Putrajaya yesterday.

ICPT is described as an uncontrollable cost, which incurs in the energy generation including the coal, piped gas price and foreign exchange, that will be monitored and revised by the government in a six-month period.

EIF commenced last year under the Electricity Supply Act 1990 Order 2017.

The Order stated that TNB shall allocate and pay to the fund all monies accrued, including interest, due to savings or penalty derived from implementing and enforcing the power purchase agreement with other licencees.

“We are left with around RM300 million that have to be managed (to support the rebate),” Azhar said, not dismissing that the surcharge might be absorbed by the consumer when the resource is exhausted.

Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Johnity Ongkili was reported as saying that the Cabinet had agreed to bear the electricity tariff amounting to RM929.37 million from Jan 1 until June 30 this year.

Commenting on this, Azhar said TNB would absorb the surcharge through an electricity supply system.

Apart from the fund, the ICPT rebate will also be absorbed by TNB via unused capital expenditure (capex) and operating expenditure (opex) approved by EC in the first regulatory period (RP1) of 2015-2017 under the incentive-based regulation mechanism.

“There were some savings in the system which were from capex and opex reduction — meaning they (TNB) did not use all that had been approved to them.”

So, with all these savings, we are using them to cushion the next impact,” Azhar said.

He added that during RP1, the approved capex was RM18.5 billion, while approved opex was RM18.4 billion, but TNB only used RM17 billion and RM17.5 billion respectively.

In RP1, the actual average selling price was 39.45 sen/ kilowatt hour (kWh), 0.93 sen higher than the approved average base tariff at 38.53 sen/kWh.

For theRP2 (2018-2020), consumer will continue to enjoy the rate at 39.45 sen/kWh.