TNB to continue ICPT mechanism until year-end
Tenaga Nasional Bhd (TNB) said the implementation of Imbalance Cost PassThrough (ICPT) mechanism will be continued from July 1 until December 31 this year.
In a filing with Bursa Malaysia yesterday, the national utility company said from January 1 until June 30, the additional generation cost or imbalance cost was RM1.59 billion, mainly due to higher fuel and generation cost.
The ICPT continuation was approved by the government via a letter from the Energy Commission (EC) yesterday.
TNB said the approval was due the increase in the average coal price to US$99.235 (RM410.56) a tonne compared with a forecast of US$75 a tonne in the base tariff for Regulatory Period 2 (RP2) for 2018 to 2020.
Higher electricity demand has also resulted in an increase in the fuel and generation cost for the period, it said.
To cushion the impact of the additional costs, the government has approved several measures, including the use of RM107 million from Kumpulan Wang Industri Elektrik and revenue adjustment at TNB, in line with the Incentive Based-Regulation (IBR) mechanism amounting to RM336.7 million agreed during the base tariff determination in RP2.
Therefore, the remaining imbalance cost to be passed through is RM1.14 billion.
The ICPT implementation for the July 1-December 31 period for full recovery of the RM1.14 billion is based on unchanged tariff of 39.45 sen/kWh.
TNB said residential customers would not be affected by the ICPT surcharge and none would be imposed on domestic customers.
Current ICPT surcharge of 2.55 sen/kWh would continue from July 1 to December 31 for all nondomestic customers, it added.
The ICPT continuation reflects the cabinet’s decision on May 3 2017 that allows the adjustment of regulated piped-gas price for the power sector with an automatic increase of RM1.50/mmbtu every six months until it reaches reference market price, starting from last year to next year.
ICPT is a mechanism approved by the government and has been implemented by EC since January 1 2014 as part of the IBR — a wider regulatory reform.
It allows TNB to reflect changes in fuel and generation costs in consumer ’s electricity tariff in every six months.
TNB said the ICPT implementation would not affect its business operations and financial position.