No hike in electricity tariff for domestic users

  • Nation
  • Wednesday, 11 Dec 2019

PUTRAJAYA: The electricity tariff for domestic consumers will be maintained, while the surcharge for non-domestic consumers will be reduced effective Jan 1 until June 30 next year, according to the Energy Commission (ST).

It said 7.4 million domestic consumers would be exempted from paying a surcharge, while non-

domestic consumers would enjoy a surcharge reduction, which is the reduction of effective electricity tariff rate in their electricity bills.

ST said during the period, RM376.45mil was to be released to consumers in Peninsular Malaysia through the imbalance cost pass-through (ICPT) surcharge.

“Some RM62.95mil is to be released to the domestic consumer category, while RM313.5mil is to be released for commercial and industrial users, ” it said in a statement yesterday.

For domestic consumers, RM62.95mil from Kumpulan Wang Industri Elektrik would be used to cover the ICPT surcharge.

“This means that domestic consumers will not experience any increase in electricity tariff for 18 months in a row, ” it said.

For the commercial and industrial users’ category, a surcharge of 2.55 sen per kWh was imposed from July to December this year.

“Given the reduction in fuel costs over the last six months, the commercial and industrial consumer surcharge rates will be reduced by 0.55 sen/kWh from 2.55 sen/kWh to two sen/kWh, ” it said.

ST said that was a decline in actual coal costs between July and December but the actual average coal prices, however, were still above the benchmark fuel prices set in the base tariff for Regulatory Period 2 (RP2) of the incentive-based regulations mechanism from 2018 to 2020.

“This price increase is beyond the control of the government because it is based on global market prices. Higher electricity demand also contributed to the rising cost of fuel and related costs for the July to December 2019 period, ” it said.Through this mechanism, the base electricity tariffs for 2018 to 2020 are determined by setting the benchmark coal and gas fuel prices during that period.

ST said any difference in actual cost with the benchmark price in the base tariff would be adjusted every six months under the ICPT mechanism either in the form of surcharge or rebate, depending on fuel costs and other costs generated during the period.

“In other words, the surcharge rate or ICPT rebate, for January to June 2020 is determined by the July to December 2019 fuel prices, ” it said.

Meanwhile, the Federation of Malaysian Consumers Associations (Fomca) welcomed the move by the government to maintain the tariff.

Fomca chief executive officer Datuk Paul Selvaraj said energy was one part of consumers’ utility expenses and the decision would help mitigate an increase in the cost of living.

“We support the move for domestic users. We hope it will help stabilise the cost of living, ” he said.

For non-domestic consumers, Paul said he hoped any savings industries get would benefit consumers too.

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