1. How much is the ICPT rebate to be passed through to customers for the period of 1 January 2023 to 30 June 2023?

Imbalance Cost Pass-Through (ICPT) implementation for the period of 1 January 2023 – 30 June 2023 are as follows:

• As announced by Minister of Natural Resources, Environment And Climate Change (NRECC), YB Tuan Nik Nazmi Nik Ahmad on 16th December 2022, Government has agreed that all domestic customers  will not incur any tariff increase following the electricity tariff adjustment through the Imbalance Cost Pass-Through (ICPT) mechanism for the period of 1 January 2023 – 30 June 2023.
   
• At the same time, non-domestic customer under lower voltage commercial and low voltage industrial (LV) which includes micro businesses, small and medium enterprises (MSMEs – Tariff B & D) including restaurants, groceries, bakeries, small workshops and such will not be facing any electricity tariff increase as well. For this category of customers, the government allocates RM8.74 billion in subsidy.
   
• To ensure that there are no increase in prices of food and agricultural products, non-domestic customers for low & medium voltage specific agriculture such farmers and animal breeders, which is categorized as specific agriculture (Tariff H, H1 and H2), will also not incur any electricity tariff increase. The government allocates RM90 million in subsidy for this category of customers
   
• This means that 9 million electricity customers which is over 90 percent of users in the whole of Peninsular Malaysia will not be affected by the increase in fuel prices for electricity generation.
   
• However, medium voltage (MV) and high voltage (HV) customers among industry participants including multinational corporations will face a surcharge at the rate of 20 sen/kWh. Government will subsidize RM1.93 billion in order to avoid a significant increase on the surcharge should it be passed on entirely to the customers.
   
• The global energy crisis has given rise to unprecedented pressure to the electricity energy industry due to the significant increase in fuel prices. This results in soaring costs of electricity generation and the electricity tariff adjustment through the ICPT mechanism being at a high rate of RM16.16 billion from the period of July to December 2022.
   
• At the increased cost of generation, all electricity customers in the peninsular could be charged a surcharge of 27 sen/kWh for the period of 1 January to 30 June 2023 which will increase the cost of living should it be passed down entirely to customers. Meanwhile, should the whole cost of ICPT be subsidized, the government will have to bear a larger budget allocation and a great burden.
   
• The ICPT implementation for period 1 January 2023 – 30 June 2023 is as follows:
  
  Domestic Customers:
  
  - The ICPT rebate of 2.00 sen/kWh from the last ICPT implementation period is maintained for all Domestic customers.
  
  Non - Domestic Customers:
  
  - The ICPT surcharge of 3.70 sen/kWh from the last ICPT implementation period is maintained for non domestic customers under lower voltage commercial and low voltage industrial (LV) which includes micro businesses, small and medium enterprises (MSMEs – Tariff B & D) including restaurants, groceries, bakeries and small workshops.
  
  - The ICPT surcharge of 3.70 sen/kWh from the last ICPT implementation period is maintained for non domestic customers for low & medium voltage specific agriculture such farmers and animal breeders which is categorized as specific agriculture (Tariff H, H1 and H2).
  
  - However, medium voltage (MV) and high voltage (HV) customers among industry participants including multinational corporations will face a surcharge at the rate of 20 sen/kWh.
  
  * Domestic customers refer to Residential customers
  * Non-Domestic customers refer to Commercial, Industrial customers and others

2. Who will be affected by the ICPT rebate or surcharge from 1 January 2023 – 30 June 2023?

For the period of 1 January 2023 – 30 June 2023, the ICPT implementation is as follows:

All category of customers either Domestic or Non Domestic will be impacted by the ICPT implementation either in the form of rebate or surcharge as announced by the Minister of Natural Resources, Environment And Climate Change (NRECC) on 16th December 2022.

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 6 months, would reflect the actual costs in tariff in from of rebate or surcharge.

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 rebate or surcharge depending on cost savings or cost increased 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.

Because of this, the cost of fuel to generate electricity has gone up significantly high which causes to increase in Generation cost by 74% that resulted to a high ICPT surcharge for the period of 1 January 2023 – 30 June 2023.

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

The calculation and methodology of ICPT is determined by Suruhanjaya Tenaga, subject to Government approval on a 6-monthly basis.

There are two key components in ICPT:

• Fuel Cost Pass-Through (FCPT): FCPT component captures any variation in fuel cost (specific to piped gas, liquefied natural gas (LNG) and coal) due to changes in the fuel price, fuel quantity, generation mix, exchange rate etc.
   
• Generation Specific Cost Pass-Through (GSCPT): 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) and 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.

Since 2015, the Government has successfully implemented seventeen (17) ICPT cycles, and has provided protection amounting to RM 22.46 billion, including the most recent RM10.76 billion subsidies for the ICPT implementation of January to June 2023, to cushion the impact of high fuel prices.

ICPT impact depends on the amount of energy consumed and the charge is reflected in form of 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 Domestic

Sample of Bill for Non-Domestic

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

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

The government has provided a user-friendly ICPT Calculation platform through the www.myelectricitybill.my portal on Suruhanjaya Tenaga’s official website (www.st.gov.my) for more information. The ICPT calculator will help customers estimate ICPT rate on their monthly electricity bills beginning July 2022.

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 & forex forecast to estimate the cost of ICPT at the next tariff adjustment.

In addition, as a measure to minimize the cost of electricity bills, consumers in the Peninsula are encouraged to take advantage of the Net Energy Metering (NEM) Program and to implement measures to use electricity efficiently. There are various easy ways that can be done to minimize electricity consumption, among them are:

• Conduct energy consumption audits by monitoring and analyzing electricity consumption as well as identifying equipment, processes and systems that can be improved to avoid waste energy.
• Identify and acquire electrical appliances that have a 5-Star rating which provides more electrical energy savings. Currently, consumers can redeem e-rebates worth up to RM400 for every purchase of electrical appliances labeled 4 or 5 Stars. Among the electrical equipment involved in the SAVE 3.0 Program are air conditioners, refrigerators, rice cookers, microwaves, televisions and washing machines.
• To make sure all switches are off when not in use to avoid wastage of electrical energy.