Postpone revision of electricity tariff to next year


THE government should postpone its Third Regulatory Period Review to determine the new electricity tariff rate until next year.

Association of Water and Energy Research Malaysia president S Piarapakaran said delaying the revision on the tariff rate for another year would not have a huge impact on the economy but instead will benefit economic growth.

“What we need to know before the Third Regulatory Period is done is how the world energy consumption is going to be.

“Coal is not something that is desired, even if the price of coal drops next year. Malaysia needs to minimise electricity generation using coal even if it is cheaper,” he told The Malaysian Reserve (TMR) recently.

Putrajaya had recently announced it will revise the electricity tariff from 2022 to 2024 to lessen the burden of the people.

Energy and Natural Resources Minister Datuk Seri Takiyuddin Hassan said the government had done a review on the matter based on the situation in the country which is in the recovery phase post-pandemic.

The average basic electricity tariff rate currently remains at 39.45 sen per kilowatt hour in the peninsula.

Piarapakaran said the government should also focus on addressing the issue of generation reserve margin.

He said the reserve margin should be at 22% but it currently stands at over 50%.

“There is a system cost that will be borne by the consumers because you have the additional capacity that is not going to be used and always be on standby.

“The government is pushing for more renewable energy (RE) so when more RE comes on board, the reserve margin will increase further,” he said.

SME Association National VP Chin Chee Seong told TMR the government should reduce the tariff rate and help the small and medium enterprises (SMEs) by providing them with a monthly electricity discount.

“A monthly discount ranging between 30% and 50% subject to the industry they are in would certainly help the small players. For SMEs this would be survival for them,” he said.

The Malaysia Retail Chain Association (MRCA) opined the cost of doing business has increased due to external factors that are beyond retailers’ control.

The new tariff revision should provide some relief from a business expenditure perspective, it said.

“Electricity remains one of the main general expenses for residences and businesses. It is important to maintain the rate at an affordable level considering that many still continue to be affected by the pandemic crisis followed by the natural disaster.

“For now, we believe the government should look into revising the rates downwards if not keeping the current tariffs. Rates should not be allowed to revise upwards, at least not in 2022,” it told TMR.

With regards to the recovery within the industry, MRCA said it hinges on the government’s resolution of the pandemic.

It said the government should assess the economic situation progressively and continue such assistance if the situation warrants it.