Electricity tariff rate remains at 39.5 sen kWh for now

Govt has decided to suspend the implementation of the National Energy IBR for the Regulatory Period 3 on Dec 31, 2021

by TMR / pic by TMR FILE

THE average basic electricity tariff rate remains at 39.45 sen per kilowatt hour (kWh) in the peninsula pending the government’s announcement on the new tariff rate, the Energy Commission (EC) said.

In a recent statement, the Energy Commission (EC) said the government has decided to suspend the implementation of the National Energy Incentive-Based Regulation (IBR) for the Third Regulatory Period (RP3) on Dec 31, 2021.

In the meantime, the government also decided to postpone the implementation of electricity tariff adjustment under the Imbalance Cost Pass Through (ICPT) mechanism from Jan 1, 2022, until a date to be determined. As such, the current rebate rate of two sen/kWh to all electricity consumers in the peninsula is maintained for that period.

With the decision to postpone this RP3 and ICPT, users in the peninsula will not experience an increase in basic electricity tariff rates.

In June last year, the 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.

TNB said the ICPT rebate is partly the result of the 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 (RM292) per metric tonne (MT) compared to the benchmark coal price set in the base tariff at US$67.45/MT.

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 the 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.