PUTRAJAYA: Electricity will cost between 3.5% and 5.8% less from March 1 to June 30.
Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili announced the reduction yesterday in a move that would see domestic consumers saving between RM13.50 and RM45 on their monthly bills.
He said about 70% of consumers were expected to benefit from the changes with the 5.8% reduction applied to Peninsular Malaysia while the 3.5% reduction was for Sabah and Labuan.
Dr Maximus said the cuts were possible because Tenaga Nasional Bhd (TNB) saved a total of RM726.99mil from lower fuel and power-generation costs.
On the four-month period for the reduction, Dr Maximus explained that any adjustment would be based on the imbalance cost pass-through (ICPT) mechanism, which was done every six months and the next review was in June.
The ICPT mechanism allows the Government to increase or reduce electricity rates based on the underlying prices of coal, gas and crude oil.
“Since there have been savings following the reduction in production cost, we decided to lower the tariff before the next review.
“Whether (or not) there will be any changes after June, we will cross that bridge when the time comes,” he said.
The 5.8% reduction represents a cut of 2.25sen/kilowatt hour (kWh) of the average tariff of 38.53sen/kWh while the tariff in Sabah and Labuan will be reduced by 1.20sen/kWh of the average tariff of 34.52sen/kWh.
Dr Maximus said this would mean consumers in the peninsula would pay an average tariff of 36.23sen/kWh.
He said consumers in Sabah and Labuan would be paying an average of 33.32sen/kWh.
“The new tariffs are for those consuming more than 300kWh a month and it applies to all types of consumers.
“For domestic users, they can expect savings of between RM13.50 and RM45 on their bills,” he said, adding that the decision was made at a Cabinet meeting yesterday.
Consumers in Peninsular Malaysia pay 21.8sen/kWh for the Lifeline Band 0-200kWh, which refers to the first 200kWh of usage, a tariff that has been in place since 1997.
The tariff for a power usage of 201-300kWh a month is 33.4sen/kWh, around since 2009.
“There are about one million domestic consumers whose monthly bill is RM20 or less, that are paid by the Government through subsidy.
“The total subsidy is RM150mil and it covers consumers in Sabah and Sarawak,” Dr Maximus said.
He added that the reduction for Sabah and Labuan would mean the Government had to maintain a RM260mil annual fuel subsidy for Sabah Electricity Sdn Bhd (SESB).
“The subsidy is given because the revenue collected by SESB does not adequately cover its operating costs.
“Besides the fuel subsidy, the Government has approved a RM2.3bil allocation in the form of grants to develop 81 electricity infrastructure projects in Sabah between 2015 and 2020,” he said.
He said this included the state’s System Average Interruption Duration Index, which tracks the frequency of power disruptions.