A connection charge is the upfront payment made by customers who require a new electricity supply infrastructure and/or an upgrade of an existing infrastructure to cater for additional power supply. The connection charge is imposed as part of TNB’s cost to build the infrastructure for an electricity supply.
Type of Customers
Consumers are categorised based on the supply voltage level, as follows:
Category 1: Supply voltage of 132 kV and above
Category 2: Supply voltage from 6.6 kV and below 132 kV
Category 3: Supply voltage below 6.6 kV
Statement of Connection Charges
Connection Charges for Category 2
Connection charge per kilowatt Maximum Demand (kW MD) is applicable. The amount to be paid depends on the Maximum Demand requested by the consumer
- Where the substation building and the lad is to be leased to TNB at a nominal cost of RM10, the connection charge is RM 45/kW MD, or
Where the substation building is to be built and the land has to be purchased by TNB at a price agreed with the owner, the connection charge is RM 68/kW MD
- Not withstanding the above, if any disagreement arises between the owner and TNB, then the cost of any land will be determined in the manner as stipulated in the provisions of the Electricity Supply Act 1990
Applicable only for request of supply not more than 6 kilometer away from the nearest available supply (that could meet the requested load demand).
- Should the nearest available supply be unable to meet the requested load, the supply may have to be drawn from the nearest substation. In this case, the connection charge still applies as long as the distance does not exceed 6 km
- Should the distance exceed 6 km, then the consumer will only pay for the size of the cable necessary to meet the requested load in excess of 6 km based on full cost of the cable, even though a larger cable may be laid by TNB to meet the demand of other consumers
Connection Charges for Category 1
Connection charge to be calculated from first principle as per Schedule 4.
The cost of the project attributable to the consumer depends on the nature of the supply. It will be full cost if it is fully dedicated to him or a portion of the cost if the transmission lines will form part of TNB’s transmission network. The apportionment will be according to the requested Maximum Demand of the consumer and the carrying capacity of the transmission line.
An annual return to meet TNB’s cost of capital which is currently fixed at 11% is required. The period of recovery is 15 years. If the return falls short of the annual return required, then a connection charge is to be levied so that the required return by TNB is achieved.
Project minimum monthly charge, guaranteed minimum monthly charge and liquidated damages for consumer are to be calculated on first principles as per Schedule 5X
The government has passed the Electricity Supply Act whereby TNB is allowed to collect a deposit of two (2) months of the customer’s electricity usage.
Commercial Initial Deposit for Ordinary Power Customer (OPC)
The calculation of deposit for ordinary power customer in the commercial, industrial,agriculture, mining cagegories are fixed, based on the Maximum Demand declared, as shown in the table below:
|No.||Maximum Demand Declared (kW)||Inittial Deposit (RM)|
|1||Up to 1||240|
|2||1.1 to 2||490|
|3||2.1 to 3||760|
|4||3.1 to 4||1,020|
|5||4.1 to 5||1,280|
|6||5.1 to 6||1,540|
|7||6.1 to 7||1,800|
|8||7.1 to 8||2,060|
|9||8.1 to 9||2.330|
|10||9.1 to 10||2,590|
|11||10.1 to 11||2,850|
|12||11.1 to 12||3,110|
|13||12.1 to 13||3,370|
|14||13.1 to 14||3,630|
|15||14.1 to 15||3,890|
|16||15.1 to 16||4,160|
|17||16.1 to 17||4,420|
|18||17.1 to 18||4,680|
|19||18.1 to 19||4,940|
|20||19.1 to 20||5,200|
|21||20.1 to 25||6,510|
|22||25.1 to 30||7,820|
|23||30.1 to 35||9,130|
|24||35.1 to 40||10,430|
|25||40.1 to 45||11,740|
|26||45.1 to 50||13,050|
|27||50.1 to 55||14,360|
|28||55.1 to 60||15,670|
Commercial Initial Deposit for Large Power Customer
Deposit for accounts are calculated as shown below :
Security deposit : 2 x [ Maximum Demand (kW) x #Load Factor x 730 hours x Tariff Rate ]
#Typical load factor
|CUSTOMER TYPE||Typical Load Factor|
|Industries||Single shift||0.15 - 0.25|
|Double shift||0.40 - 0.60|
|Triple shift||0.60 - 0.95|
Deposit Payment Method
For deposits less than RM2,000, customers are required to pay in cash.
For deposits more than RM2,000, a bank guarantee is preferred.X
Connected Load Charge (CLC)
CONNECTED LOAD CHARGE (CLC)
- Connected Load Charge is a mitigating tool to discourage consumers from over declaring their load requirement. Over declaration will lead to over plant up and waste of resources and increase in reserve margin. Without CLC, other consumers have to also pay for the unnecessary higher cost of electricity due to wastage and this is unfair to those who properly declare.
- Other utility who does not have CLC penalty, recover their demand component or fix cost via imposing contract capacity charge through their tariff rate based on consumer declaration.
- All new medium voltage and high voltage consumers (consumers with supply voltage at 6.6kV and above) are subjected to CLC for a period of 6 years from the date the supply was commissioned with CLC exemption for the first year only.
- or any supply and/or load and/or voltage upgrade, the consumer will be levied new CLC based on the total maximum demand declared (i.e current maximum demand plus additional maximum demand).
- CLC is applicable when the actual Maximum Demand (MD) recorded on any month is less than 75% of the declared maximum demand during the said period.
- CLC is imposed based on the shortfall between the 75% of the declared maximum demand and maximum demand recorded in a month. CLC rate charges are RM8.50 per kilowatt and subjected to prevailing changes from time to time.
- Nevertheless, for the first 3 years, the CLC will be based on staggered percentage to assist consumer during the initial stage of their operation.
- The method in determining Reference Maximum Demand* for calculating CLC are as follows:
Year Reference Maximum Demand* 1 0% x 75% x Declared Maximum Demand(CLC exempted for the first year only) 2 50% x 75% x [Declared MD or Highest Recorded MD, whichever is higher] 3 75% x 75% x [Declared MD or Highest Recorded MD, whichever is higher] 4 100% x 75% x [Declared MD or Highest Recorded MD, whichever is higher] 5 100% x 75% x [Declared MD or Highest Recorded MD, whichever is higher 6 100% x 75% x Declared MD or Highest Recorded MD, whichever is higher]
Note: CLC is applicable when MD recorded < Reference MD.
- A penalty of RM8.50/kW will be charged for every kW shortfall between the Actual Maximum Demand used compared to the Reference Maximum Demand (RMD).
- CLC is calculated monthly.
- CLC penalty RM8.50 is well below the Maximum Demand rate.
- Example of CLC calculation:
Year Maximum Demand Declared(assume 10,000kW) Reference Maximum Demand(RMD) Actual Maximum Demand(AMD)(kW) CLC Penalty(RM) 1 10,000kW 0% x 75% x 10,000kW = 0kW 100kW Not Applicable 2 10,000kW 50% x 75% x 10,000kW = 3,750kW 5,000kW No penalty. AMD > RMD 3 10,000kW 75% x 75% x 10,000kW = 5,625kW 5,000kW CLC = RM8.50 x ( 5,625kW - 5,000kW ) = RM5,312.50 4 10,000kW 100% x 75% x 10,000kW = 7,500kW 7,500kW No penalty. AMD > RMD 5 10,000kW 100% x 75% x 10,000kW = 7,500kW 8,000kW No penalty. AMD > RMD 6 10,000kW 100% x 75% x 10,000kW = 7,500kW 8,000kW No penalty. AMD > RMD
Few activities could be carried out by customers that assist in reducing MD charges such as:
- Practicing demand side management such as peak shift i.e. shifting their peak operation/consumption to off peak period as MD charges is not applicable during off-peak period for customer with peak/off-peak tariff
- Opting for any promotional scheme offered by TNB relating to MD such as Sunday Tariff Rider Scheme (STR).
- Starts your motor/equipment in stages or during off-peak period
Power Factor Surcharge
A Power factor surcharge is imposed when your power factor is less than 0.90 (electricity supply 132kV and above) or less than 0.85 (electricity supply below 132 kV).
Power factor surcharge for customers with electricity supply below 132 kV is calculated as follows:-
- 1.5% surcharge of the current bill – for every 0.01 less than 0.85 power factor.
- 3% surcharge of the current bill – for every 0.01 less than 0.75 power factor.
Current bill: RM2,000
|Power Factor||= 0.80|
|Surcharge||= [(0.85 – 0.80) / 0.01] x 1.5% x RM2,000 = RM150|
Current bill: RM2,000
|Power Factor||= 0.75|
|Surcharge||= [(0.85 – 0.75) / 0.01] x 1.5% x RM2,000 = RM300|
Current bill: RM2,000
|Power Factor||= 0.60|
|Surcharge||= [((0.85 – 0.75) / 0.01) x 1.5% x RM2,000] + [((0.75 – 0.60) / 0.01) x 3% x RM2,000] = RM1200|
Power Factor is an index used to compute the efficiency level of electricity usage. The index is measured from 0 to 1. A higher index shows efficient usage of electricity and vice versa. Low power factor shortens the lifespan of electrical appliances and causes power system losses to TNB. To understand power factor, we will start with the definition of some basic terms:-
|KW||Working Power (also called Actual Power, Active Power or Real Power). It is the power that powers equipment and performs useful work.|
|KVAR||Reactive Power. It is the power which magnetic equipment such as transformers, motors and relays need to produce the magnetizing flux.|
|KVA||Apparent Power. It is the vectorial summation of KVAR and KW.|
Let’s look at a simple analogy in order to better understand these terms. Let’s say you are at a park and it is a hot day. You order a glass of a carbonated drink. The thirst-quenching portion of the drink is represented by KW. Unfortunately, along with your drink comes a little bit of foam. The foam does not quench your thirst. This foam is represented by KVAR. The total content of your glass, KVA, is this summation of KW (the carbonated drink) and KVAR (the foam).
|Power Factor is the ratio of Working Power to Apparent Power. Power Factor = KW / KVA|
Looking at our carbonated drink analogy, power factor is the ratio of carbonated drink (KW) to the carbonated drink plus foam (KVA). Power Factor = KW / (KW + KVAR) = Carbonated drink / (Carbonated drink + foam)
|Thus, for a given KVA:- i. The more foam you have, the lower your power factor. ii. The less foam you have, the higher your power factor.|
For efficient usage of electricity, power factor must approach 1.0. A Power factor that is less than 0.85 shows inefficient use of electricity.
|Calculation for Power Factor =||√(KWh2 + KVARh2)|
In our carbonated drink analogy, low power factor resulted when the amount foam is was large. Low power factor is caused by inductive loads, which are sources of reactive power. Examples of inductive loads are:-
- Induction motors
- High Intensity Discharge (HID) lighting
Inductive loads constitute a major portion of power consumed by commercial and industrial sectors.
Customers are advised to follow these steps:-
- Install capacitors (KVAR Generators)
- Synchronous generators
- Synchronous motors
- Minimise operations of idling or lightly loaded motors.
- Avoid operating equipment above its rated voltage.
- Replace standard motors as they burn out with energy efficient motors.
Benefits of Improving Power Factor
Benefit 1: Reducing KW billing demand
Low Power Factor requires high reactive power (KVAR) and apparent power (KVA), which is the power that TNB supplies. Therefore, a facility’s low power factor forces TNB to increase its generation and transmission capacity in order to handle this extra demand. By increasing the power factor, customers use less KVAR. This results in less KW, which equates to RM savings for TNB.
Benefit 2: Eliminating power factor surcharge
Utility companies all around the world charge customers an additional surcharge when their power factor is less than 0.95. In fact, some utilities are not obliged to deliver electricity to their customers at any time the customer’s power factor falls below 0.85. Thus, customer can avoid this additional surcharge by increasing power factor. In Malaysia, TNB is allowed through the Malaysian Grid Code and the Malaysian Electricity Distribution Code, to impose a surcharge to the customer if the power factor is <0.85 for customers receiving less than 132kV.
Benefit 3: Increased system capacity and reduced system losses in your electrical system
Low power factor causes power system losses in the customer’s electrical system. By improving power factor, these losses can be reduced. With the current rise in the cost of energy, increased facility efficiency is important. Moreover, with lower system losses, customers are able to add additional load in their electrical system.
Benefit 4: Increased voltage level in your electrical system, resulting in more efficient motors
As power losses increase, customer may experience a voltage drop. Excessive voltage drops can cause overheating and premature failure of motors and other inductive equipment. Therefore, by raising the power factor, customers can minimise these voltage drops along feeder cables and avoid related problems. Motors will run more efficiently, with a slight increase in capacity and starting torque.X
Electrical welding equipment
Electrical welding equipment
In addition to the appropriate tariff rate, there will be a surcharge for transformer-operated electric welding equipment installed for low voltage consumers at RM3.00 per kVA per month, and for medium and high voltage consumers at RM2.00 per kVA per month. Motor-operated welding sets are exempted from the foregoing surcharge. X
The supply agreement for the temporary load shall be time restricted and the consumer shall be subjected to a Connection Charge of 100% of the total cost of installing and subsequent dismantling of TNB’s infrastructure to provide this temporary supply. X