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Tariff & ICPT

Key Highlights

1. How much is the ICPT amount to be passed through to customers?

Imbalance Cost Pass-Through (“ICPT”) implementation for the period of 1st July – 31st December 2018 are as follows:

a) The average Base Tariff remain unchanged at 39.45 sen/kWh.

b) Due to higher fuel and generation costs for the period of 1st January – 30th June 2018, the additional cost of RM698.19 million or 1.35 sen/kWh ICPT surcharge, will be pass-through via the ICPT mechanism:

i. Domestic Customers* – not affected by the ICPT surcharge

Domestic customers with monthly consumption up to 300k is not subjected by ICPT implementation.

For domestic customers with monthly consumption above 300kWh, the ICPT surcharge will be funded by Kumpulan Wang Industri Elektrik (“KWIE”). Hence the ICPT rate is set at 0 sen/kWh.

ii. Non-domestic Customers

An ICPT surcharge of 1.35 sen/kWh will be applicable.

*Domestic customers refer to Residential customers

2. Who will be affected by this ICPT surcharge?

This ICPT surcharge will be applicable to all Non-domestic customers.

All Domestic customers will not be affected by this ICPT surcharge as the ICPT rate is set at 0 sen/kWh. Domestic customers with monthly consumption of 300kWh and below is not subjected to ICPT mechanism.

3. Why Domestic customers with monthly consumption of 300 kWh and below are not affected by this ICPT implementation?

Domestic customers with monthly consumption of 300kWh (RM 77.00) and below were not affected in the previous tariff reviews i.e.:

(i) Tariff rate for Lifeline Band consumers (0-200 kWh) has been maintained at 21.8 sen/kWh since 1997; and
(ii) Tariff rate for 201-300 kWh band has been maintained at 33.4 sen/kWh since 2009.

Furthermore, the Government will continue to subsidise around 1 million Domestic customers under the Lifeline Band with monthly bill of RM 20.00 and below. Therefore, these customers will not be affected by ICPT implementation.

What is Imbalance Cost Pass-Through (ICPT)?

ICPT is a mechanism under the Incentive Based Regulation (IBR) framework which allows TNB as the utility to reflect changes (either increase or reduction) in fuel and other generation-related costs in the electricity tariff every six (6) months. Since its implementation in 2014, a total of RM6.3 billion of ICPT rebate and subsidy have been passed through to electricity customers in Peninsular Malaysia.

Who is responsible for ICPT calculation methodology?

Suruhanjaya Tenaga as Malaysia’s energy regulator determines the calculation and methodology of the ICPT, subject to Government approval on a 6-monthly basis.

What are the components of Imbalance Cost Pass-Through (ICPT)?

There are two ICPT key components:

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

How is the ICPT amount calculated?

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

What is the rationale behind the current ICPT surcharge?

Due to higher fuel and generation costs for the period of 1st January – 30th June 2018, the additional cost of RM698.19 million or 1.35 sen/kWh ICPT surcharge, will be pass-through via the ICPT mechanism:

i. Domestic Customers* – not affected by the ICPT surcharge
Domestic customers with monthly consumption below 300kWh will not be affected by this ICPT implementation.

For domestic customers with monthly consumption above 300kWh, the ICPT surcharge will be funded by Kumpulan Wang Industri Elektrik (“KWIE”).

ii. Non-domestic Customers
An ICPT surcharge of 1.35 sen/kWh will be applicable.

*Domestic customers refer to Residential customers

How will the ICPT impact my electricity bill?

  • It is a charge that is applicable for every kWh of electricity consumed. ICPT is a variable component in the electricity bill where the ICPT is charged based on your consumption of electricity on a monthly basis.
  • The ICPT is straight “pass-through” charge and its calculation is the number of kWh consumed in a month multiplies by the ICPT rate (in sen/kWh). The ICPT charge will then be added to or subtracted from your current bill amount.

Are all customers affected by ICPT?

Yes, all customers are affected by ICPT except Domestic customers with monthly consumption of 300kWh and below. Domestic customers with monthly consumption above 300kWh is not affected by the ICPT surcharge as the rate is set at 0 sen/kWh.

Why are Domestic customers with monthly consumption of 300 kWh (RM 77.00) and below not affected by this ICPT implementation?

Domestic customers with monthly consumption of 300kWh (RM77.00) and below were not affected in the previous tariff reviews i.e.:

(i) Tariff rate for Lifeline Band consumers (0-200 kWh) has been maintained at 21.8 sen/kWh since 1997; and

(ii) Tariff rate for 201-300 kWh band has been maintained at 33.4 sen/kWh since 2009.

Furthermore, the Government will continue to subsidise around 1 million Domestic customers under the Lifeline Band with monthly bill of RM 20.00 and below. Therefore, these customers will not be affected by this ICPT implementation.

Do all customers pay the same amount of ICPT charges?

The ICPT charge on your electricity bill may differ from your neighbour's 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.