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BUSINESS

Govt decides to maintain electricity tariff from Feb 1, 2022 to Dec 31, 2024 -- EC

28/01/2022 10:47 PM

KUALA LUMPUR, Jan 28 -- The government has decided to maintain the current electricity tariff rate for domestic users in Peninsular Malaysia for the Regulatory Period 3 (RP3) from Feb 1 to Dec 31, 2024 under the Incentive-Based Regulation (IBR) mechanism.

According to the Energy Commission (EC), the tariff rate has been used since Jan 1, 2014 when the IBR mechanism was introduced as a new policy in the setting of electricity tariffs, and this decision also applies to commercial and industrial users.

In a statement today, the EC said for July 1, 2021 to Dec 31, 2021 period, there was an increase in fuel cost and other generation costs totalling RM1.67 billion, following the rise in coal prices which hit US$200 per tonne.

Hence, under the Imbalance Cost Pass-Through (ICPT) mechanism which is reviewed every six months, the government also decided on the continued implementation from Feb 1 until June 30 this year.

This means the rebate of two sen per kWh is maintained for all domestic users without any surcharge, and no hike in electricity tariff for all domestic users in the peninsula.

A surcharge of 3.70 per kWh will be imposed on all non-domestic users from the commercial and industrial, it said.

"To maintain the rebate and absorb the cost of the ICPT surcharge for all users, the government has allocated RM715 million from Kumpulan Wang Industri Elektrik fund," it added.

According to the EC, under the ICPT mechanism, the cost of fuel and electricity generation will be reviewed every six months and passed on to the consumers in the form of rebate or surcharge depending on savings or increase in costs involved.

“The high increase in the market price of coal led to the increase in the electricity generation costs of 45 per cent and made a huge impact on electricity tariff in the peninsula as coal constitutes 59 per cent of the generation sources.

“The rise in coal prices is out of the government's control as it is based on global market price,” it said.

As a move to minimise the effects of higher electricity bill due to ICPT surcharge, electricity users in the peninsula are encouraged to subscribe to the Green Electricity Tariff (GET), that is, electricity supply from renewable energy (RE) so as to enjoy exemption from electricity ICPT surcharge for a one-year period.

The EC said GET customers will also get Renewable Energy Certificate which will help to fulfil the Environmental, Social and Governance (ESG) commitment and support the nation's RE agenda.

Besides that, it said users can benefit from the Net Energy Metering (NEM) programme to reduce the cost of electricity bill.

The EC added that users are also encouraged to implement efficient electricity usage, among them, by having energy usage audit, buy electrical appliances with five-star rating which gives more cost-savings, switch off when not in use, and use electrical equipment more efficiently.

-- BERNAMA


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