Government to foot RM1.3bil electric bill
It will bear imbalance cost pass-through subsidy of 2.54 sen per kWh
KUALA LUMPUR: The Government will bear RM1.303bil from the imbalance cost pass-through (ICPT) subsidy of 2.54 sen per kWh to consumers from July 1 until Dec 31, 2017.
In a filing with Bursa Malaysia, Tenaga Nasional Bhd (TNB) said the actual imbalance cost from January to June 2017 was RM523.23mil, resulting in a surcharge of 1.02 sen/kWh.
“This additional cost was mainly due to rising coal prices in the global market and due to the impact of foreign exchange rates on ringgit, additional gas cost of RM280mil following the Government’s subsidy rationalisation plan and Government’s decision to further increase the piped gas price by RM1.50 per million metric British thermal units (mmBTU) to the power sector from the current RM21.20 per mmBTU to RM22.70 per mmBTU,” TNB said in the filing.
The new gas price of RM22.70 per mmBTU will be effective from July 1.
The cost to continue the current ICPT rebate of 1.52 sen/kWh amounts to RM780mil.
“The Government will fund the above amount of RM1.303bil by utilising the power purchase agreements (PPA) saving fund, which is a fund set up by the Government to accumulate savings from the renegotiation of PPAs with the first generation independent power producers.
“The objective of this PPA Saving Fund is to cushion the impact on tariff to the customers due to the fluctuation of fuel prices,” it said.
TNB said the 1.52 sen/kWh rebate will be applicable to all consumers except domestic consumers with monthly consumption of 300 kWh and below.
The ICPT is a mechanism approved by the Government and implemented by the Energy Commission since Jan 1, 2014 as part of a wider regulatory reform called the incentive based regulation.
The ICPT mechanism allows TNB to reflect changes in fuel and generation costs in consumer’s electricity tariff every six months, subject to Government’s decision and approval.
“TNB also wishes to inform that the impact of ICPT implementation is neutral on TNB and will not have any effect on its business operations and financial position,” TNB said.