What are the ICPT quantum as announced by the Government on 23 June 2023 for the period of 1 July 2023 – 31 December 2023?

The Imbalance Cost Pass-Through (ICPT) implementation for the period of 1 July 2023 – 31 December 2023 are as follows:

• As announced by the Minister of Natural Resources, Environment and Climate Change (NRECC), YB Nik Nazmi Nik Ahmad on 23 June 2023, the Government has agreed to continue the implementation of the Imbalance Cost Pass-Through (ICPT) mechanism for the period of 1 July 2023 - 31 December 2023. The ICPT quantum for the period of 1 July 2023 – 31 December 2023 are as follows:
  
  Domestic Customers:
  
  

  Electricity consumption of 1,500 kWh and below	Maintained Rebate Rate of 2 sen/kWh
  Electricity consumption above 1,500 kWh	Surcharge Rate of 10 sen/kWh

  
  Non - Domestic Customers:
  
  

  MSMEs* (Tariff B & D) - Low Voltage Commercial and Low Voltage Industrial customers  (LV), including restaurants, grocers, bakeries, small workshops and other such businesses.	Maintained Surcharge Rate of 3.7 sen/kWh
  Specific Agricultural (Tariff H, H1 & H2) - Low and  Medium Voltage customers including farmers, animal breeders, planters and other such businesses.	Maintained Surcharge Rate of 3.7 sen/kWh
  Water and Sewerage Operators	Reduced Surcharge Rate to 3.7 sen/kWh (Reduced from 20 sen/kWh*)
  Other Commercial and Industrial (C&I) – specifically medium voltage (MV) and high voltage (HV) customers including those involved in mining, streetlights, neon lighting and individual street lighting.	Reduced Surcharge Rate to 17 sen/kWh (Reduced from 20 sen/kWh*)

  
  Water and Sewerage Operators, the 3.7 sen/kWh surcharge covers all tariffs excluding domestic accounts.
  *As compared to 1 January 2023 to 30 June 2023 | Note: Micro, Small and Medium Enterprises (MSMEs)
   
• The global energy crisis has given rise to unprecedented pressure on the electricity energy industry due to the significant increase in fuel prices.
   
• However, over time, fuel prices have begun to recover at a slower rate where there was a slight decrease in the average fuel price from USD224 per metric ton (July-December 2022) to USD173.50 per metric ton (January-June 2023). Even so, the average price of coal remains high and exceeds the projected fuel cost set in the RP3 period, which is USD79 per metric ton.
   
• Overall, the Government has agreed to allocate an electricity subsidy of RM5.2 billion in conjunction with the electricity tariff adjustment in Peninsular Malaysia from 1 July 2023 - 31 December 2023.

2. Who will be affected by the ICPT rebate or surcharge from 1 July 2023 - 31 December 2023?

All categories of customers, either Domestic or Non-Domestic, will be impacted by the ICPT implementation, either in the form of a rebate or surcharge, as announced by the Minister of NRECC on 23 June 2023.

The electricity tariff adjustment for the customers in Peninsular Malaysia from 1 July 2023 - 31 December 2023, are as follows:

• Domestic customers with a monthly electricity consumption of 1,500 kWh and below will not experience an increase in electricity tariff. This accounts for 99% of domestic customers in Peninsular Malaysia.
  
  For  domestic customers with a monthly electricity consumption of above 1,500 kWh, a surcharge rate of 10 sen/kWh will be imposed on the total units of kWh consumed. For example, an electricity consumption of 1,501 kWh will be imposed a surcharge of RM150.10 (1,501 x 10 sen/kWh).
   
• Non-domestic customers in the low-voltage tariff category (Tariff B & D), specific agricultural tariffs (Tariff H, H1 & H2) will not experience an increase in electricity tariffs and the ICPT surcharge at a rate of 3.7 sen/kWh will be maintained.
  
  In other words, Micro, Small, and Medium Enterprises (MSMEs) including restaurants, grocers, bakeries, small workshops, farmers, animal breeders, planters and other such businesses will also not experience any increase in electricity tariffs.
   
• Non-domestic customers, namely water and sewerage operators in the states will enjoy a reduction in surcharge rates from 20 sen/kWh to 3.7 sen/kWh.
  
  This means that water and sewerage operators under the State Government will enjoy lower surcharges from July 2023 to December 2023. This decision is in line with the government's efforts to improve the capacity and capability of water operators in providing treated and clean water to customers.
   
• Non-domestic customers, specifically medium-voltage (MV) and high-voltage (HV) users from the industrial and commercial sector will enjoy a reduction in surcharge rates from 20 sen/kWh to 17 sen/kWh.
  
  This means that non-domestic MV and HV customers will enjoy a monthly decrease in electricity bills.
  
  

ICPT is a mechanism under the Incentive Based Regulation (IBR) framework which allows for TNB, as the utility, to reflect changes in fuel and other generation-related costs in the electricity tariff. This is because these costs are set based on benchmarked prices in the base tariff. The implementation of ICPT, which occurs every six (6) months would reflect the actual costs in tariff in the form of either rebates or surcharges. 

Furthermore, the impact of the ICPT implementation is neutral on TNB and will not have any effect on its business operations and financial position.

Under the ICPT mechanism, fuel and generation costs will be reviewed every six (6) months and passed through to the customers in the form of rebates or surcharges depending on cost savings or cost increases within that stipulated period. In Peninsular Malaysia, more than 90% of the electricity generated uses coal and gas where the cost of coal had increased significantly since October 2021.

Due to this, the cost of fuel to generate electricity has been significantly high which has led to increased generation costs resulting to a high ICPT surcharge rate for the period of 1 July 2023 - 31 December 2023.

There was a slight decrease in the average fuel price from USD224 per metric ton (July-December 2022) to USD173.50 per metric ton (January-June 2023), however the average price of coal remains high and exceeds the projected fuel cost set in the RP3 period which is USD79 per metric ton.

The increase in coal prices is global and beyond the Government`s control. Moreover, not just in Malaysia but also globally, all electricity generation sectors are under pressure due to the increase in fuel costs.

The calculation and methodology of the ICPT mechanism are determined by Suruhanjaya Tenaga (ST) and are subject to the Government’s approval on a 6-monthly basis.

There are two key components in the ICPT mechanism:

• Fuel Cost Pass-Through (FCPT): The FCPT component captures any variation in fuel costs (specific to piped gas, liquefied natural gas (LNG) and coal) due to changes in the fuel price, fuel quantity, generation mix, exchange rate and etc.
   
• Generation-Specific Cost Pass-Through (GSCPT): The GSCPT component captures any variation in other generation-specific costs as a result of changes in other costs associated with the Power Purchase Agreements (PPAs) & Service Level Agreements (SLAs) as well as fuel procurement contracts i.e. Coal Supply Agreement (CSA), Coal Supply and Transportation Agreement (CSTA), Gas Supply Agreement (GSA) / Gas Framework Agreement (GFA) and etc.

The ICPT is calculated based on an estimated actual fuel cost and generation-related costs for a particular six (6) months period against the corresponding baseline costs in the Base Tariff.

Moreover, the ICPT impact depends on the amount of energy consumed and the charge is reflected in the form of a rebate or surcharge monthly.

The ICPT rate is represented as sen/kWh and is applicable for every kWh of electricity consumed. Therefore, the calculation of ICPT charges will be:

The ICPT charges will then be subtracted (rebate) or added (surcharge) from your current billed amount.

Sample of Bill for Non-Domestic

Customers with solar generation such as Net Energy Metering (NEM), Self-Consumption (SelCo) are also subjected to the ICPT implementation based on the categories listed above. The ICPT calculation will be based on import consumption (kWh) from the grid. Customers with solar generation who do not have battery storage are still consuming energy from the grid during non-solar generating hours and hence are affected by the ICPT adjustments.

No. The ICPT charge on your electricity bill may differ from your neighbours as the ICPT charges depend on your energy consumption (kWh) in a month. Therefore, this amount varies from one customer to another as well as from month to month, depending on the energy consumed.

Customers are advised to implement electricity saving measures as recommended by the Suruhanjaya Tenaga to optimise their energy consumption and cost.

Since 2015, the Government has successfully implemented eighteen (18) ICPT cycles and has provided protection throughout the cycles, including the most recent where they had subsidized RM5.2 billion for the ICPT implementation from 1 July 2023 - 31 December 2023 in order to cushion the impact of high fuel prices.

It is estimated that for Domestic customers who consumes above 1,500 kWh and will be affected by the ICPT surcharge only comprises of 1% of customers which is approximately around 83,000 customers that will experience a minimum monthly increase of RM187 (25%) in electricity bills.

Although there is an increase for this category of domestic customers, the government is still providing a special subsidy of RM58 million for this category since the ICPT surcharge is not fully passed through. Customers can view the amount of subsidy provided by the government in their respective monthly electricity bills.

Also, the government hopes that the provision of this subsidy will help alleviate the cost of living for the rakyat, especially during the economic recovery period, while ensuring the continued economic development of the country.

The government has provided a user-friendly ICPT Calculation platform through the www.myelectricitybill.my portal which customers may reach through the Suruhanjaya Tenaga’s official website (www.st.gov.my) for more information. The ICPT Calculator will help customers estimate the ICPT rate on their monthly electricity bills beginning from July 2023.

The purpose of this ICPT Calculator is to educate customers to be more sensitive and alert to the changes in fuel prices and foreign exchange rates in the market. Customers can key in the coal and gas price forecasts as well as the fuel price and forex forecast to estimate the cost of ICPT at the next tariff adjustment.

The RM40 Electric Bill Rebate Program is a targeted Government assistance program to finance monthly electricity bills of up to RM40 to those who are underprivileged and registered in the eKasih system.

The program was announced by the Government in 2019 Budget Speech on 2nd November 2018, replacing the RM20 Electric Bill Rebate Program which ended in December 2018. In 2023, this program is continued for Miskin Tegar category under the eKasih system.

Eligibility for RM40 Electricity Bill Rebate Program can be verified at the Ministry of Natural Resources, Environment and Climate Change (NRECC) portal https://semakanrebat.nrecc.gov.my/apps/public/index.php or by contacting MyGCC hotline at 03-8000 8000 or TNB Careline 1-300-88-5454.

For eligible eKasih recipients that have an active TNB account (Tariff A, Domestic) will automatically receive RM40 rebate in monthly bills whereby for eligible eKasih recipients without TNB registered accounts, application may be submitted to declare third-party accounts by submitting the application form https://semakanrebat.nrecc.gov.my/apps/public/borang.phpat to the nearest Kedai Tenaga.

The Ministry of NRECC is also committed to the plan of transitioning to sustainable energy use, while balancing energy security, accessibility, and environmental sustainability. As part of these initiatives, the Ministry will encourage energy efficiency practices and the transition to renewable energy use through the installation of solar PV systems as an option for customers to control and reduce their electricity bills.

Therefore, to further encourage the installation of solar PV systems, especially on building rooftop structures, the government has decided to relax certain conditions under the Net Energy Metering (NEM) Programme and Self-Consumption for Solar PV Installation (SelCo) Programme, as follows:

1. The capacity limit for each household applying for the NEM Rakyat programme will be relaxed compared to the previous limit of 4 kW for single phase installations and 10 kW for three-phase installations. Customers can now install solar PV systems based on the specified technical criteria;
2. The allowable capacity for solar PV systems under the NEM NOVA Programme and SelCo Programme has been increased from 75% to 85%;
3. The SelCo Programme is now open for applications and participation by high-voltage (HV) customers;
4. The implementation of the new regulations under the NEM and SelCo programmes will come into effect on 15 July 2023, based on an updated guidelines provided by Suruhanjaya Tenaga;
5. Tenaga Nasional Berhad (TNB) is offering affordable and accessible solar installation packages through its wholly-owned subsidiary, GSPARX Sdn Bhd. Available at zero upfront costs, the rooftop solar offerings are tailored for Domestic customers, who are looking for long-term savings on their electricity bills.
   • Special early bird package for the first 150 customers is introduced with savings of up to RM4,999 for rooftop solar photovoltaic (PV) installations, starting today until 31 July 2023. All new packages come with free maintenance of the solar systems for a period of two (2) years and free solar insurance for one (1) year.
   • Apart from that, GSPARX has partnered with financial institutions, offering customers a range of flexible financing options. These options include a 36-month interest-free instalment plan via a credit card or a financial loan with repayment periods of up to 10 years.

Lastly, there are also other various easy ways that can be done to minimize electricity consumption, among them are:

1. Conduct energy consumption audits by monitoring and analyzing electricity consumption as well as identifying equipment, processes and systems that can be improved to avoid energy wastage.
2. Identify and acquire electrical appliances that have a 5-Star rating which provides more electrical energy savings. Among the electrical equipment are air conditioners, refrigerators, rice cookers, microwaves, televisions and washing machines.
3. To make sure all switches are off when not in use to avoid wastage of electrical energy.

For more energy efficiency tips, please visit myTNB Portal

For more information about GSPARX's current solar rooftop offerings and financing options visit: www.gsparx.com / www.tnb.com.my/solar.