Govt maintains electricity tariff rate, extends rebate

by ASILA JALIL / pic by HUSSEIN SHAHARUDDIN

THE electricity tariff rate of 39.45 sen per kilowatt-hour (kWh) will remain as the government decided to extend the rebate until year-end.

Energy and Natural Resources Minister Datuk Dr Shamsul Anuar Nasarah said due to the challenges faced by the people caused by the Movement Control Order, the government agreed to finance an additional rebate of 0.87 sen/kWh which involved an allocation amounting to RM493 million from the Electricity Industry Fund (KWIE) to maintain the tariff rate throughout the year.

“All Tenaga Nasional Bhd (TNB) account holders, which is estimated to be around 9.44 million users, will continue to enjoy an electricity rebate of two sen /kWh from July 1 until Dec 31, 2021.

“The additional rebate enables all TNB users to get an average discount of 5% for that period,” he said in a virtual press conference yesterday.

The minister said the Imbalance Cost Pass Through (ICPT) that needs to be adjusted for the second half of the year (2H21) amounts to RM638.98 million.

This translates to an electricity rebate rate of 1.13 sen/kWh that could be given to consumers instead of two sen/kWh that was applied from January until June.

Shamsul Anuar said the rise in ICPT cost was due to the increase in the cost of gas and coal supply in the first six months of the year.

The government also agreed to provide an electricity rebate of two sen/kWh to users in Kulim High Technology Park (KHTP) that obtain electric supply from NUR Power Sdn Bhd.

“This is the first time non-domestic users at KHTP will be able to enjoy the rebate since the Incentive-based Regulations mechanism was implemented in 2017.

“The rebate is given due to the decline in the price of gas fuel and TNB’s bulk electricity for 1H21 and savings from the adjustment of the actual cost of fuel for the period of July until December 2020,” he said.

He said the government will provide discounts on electricity bills for targeted domestic and non-domestic users in Peninsular Malaysia and Sabah. Prime Minister Tan Sri Muhyiddin Yassin will announce more details on the discount soon which will be applicable from July until September this year.

The hardcore poor with an income of RM1,169 and below, and those listed in e-Kasih system are eligible for a RM40 electricity rebate.

As at May 2021, the amount of heads of family that are eligible for the rebate stood at 282,182. Of the total, only 113,745 or 40.31% of them updated their electricity bill account number.

“I urge those who are eligible to update their account number with the utility company to ensure they can enjoy the rebate,” he said.

In its filing to Bursa yesterday, TNB said the ICPT rebate is partly the result of overall reduction in actual generation costs for the period of January to June 2021.

During the period, it said there was a slight increase of average coal price in the global market at US$70.06 per metric tonne (MT) compared to the benchmark coal price set in the base tariff at US$67.45/MT.

It added starting from January 2020, the gas price is set based on Reference Market Price (RMP) which replaced the former two-tier gas pricing mechanism that comprises Regulated Gas Price and liquified natural gas price.

For the period January to June 2021, the average RMP price is RM17.16 per million British Thermal Unit (mmBTU) which is lower than the benchmark gas price for the year set in the base tariff at RM27.20/mmBTU, it explained.

“Any shortfall or excess in the ICPT will be funded or transferred to customers via the KWIE fund to aid in the stabilisation of electricity tariff in the future via gradual build-up of the fund.

“TNB also wishes to inform that the impact of ICPT implementation is neutral on TNB and will not have any effect on its business operations and financial position,” it added.