Average Electricity Tariff
NOTES:
- Tariff rate for Lifeline Band Consumers (0-200 kWh, or below RM43.60) has been maintained at 21.8 sen/kWh since 1997
- Tariff rate for 201-300 kWh (RM77.00 and below) band has been maintained at 33.4 sen/kWh since 2009
- In January 2021, the RM40 Electric Bill Rebate Programme is a new programme that was introduced starting 1 January 2021. This programme had replaced the RM20 Electric Bill Rebate Programme which ended in December 2018. From 1 January 2021 until 31 December 2021, this program will continue with "Miskin Tegar" only.
The electricity tariff covers all costs of bringing electricity to your doorstep.
These include:
Cost to generate, transport and distribute electricity
Fuel cost
Operation and maintenance cost
Ministry of Natural Resources, Environment and Climate Change (NRECC) through Suruhanjaya Tenaga (ST) regulates your electricity tariff under a framework called Incentive Base Regulation (IBR).
This is to ensure that you enjoy reliable and secure supply of electricity at a reasonable price.
Incentive Based Regulation (IBR) will ensure that you are not overpaying for your electricity.
The regulator will constantly monitor costs to ensure only necessary cost is passed through to the customers.
Under the regulator’s watch, the utility provider is also expected to perform efficiently with high quality service so that you’re getting your money’s worth.
Imbalance Cost Pass Through (ICPT) is a mechanism under the Incentive Based Regulation (IBR) framework that allows TNB to reflect changes (either increase or reduce) in fuel and other generation-related costs in the electricity tariff every 6 months.
There are two ICPT key components:
The ICPT is a mechanism approved by the Government and implemented by Suruhanjaya Tenaga (“ST”) since 1 January 2014 as part of a wider regulatory reform called the Incentive Based Regulation (“IBR”). ICPT mechanism allows TNB to reflect changes in fuel and generation costs in consumer’s electricity tariff every six (6) months, subject to Government’s decision and approval.
The implementation of ICPT is neutral to TNB financial.
For 2H2023 quantum:
Domestic:
- Consumption <1500kWh – maintained rebate of 2 sen/kWh
- Consumption >1500kWh – Surcharge of 10 sen/kWh
Commercial & Industrial:
- SME – Maintained surcharge of 3.70 sen/kWh
- Water (SPAN) – Reduce surcharge of 20 sen/kWh to 3.70 sen/kWh
- Other Medium Voltage and High Voltage of Commercial and Industrial – Reduce surcharge of 20 sen/kWh to 17 sen/kWh
Based on the percentage breakdown of the electricity tariff, it is apparent that the largest component of the system cost in the electricity tariff is represent by the generation costs, which is largely contribute by the fuel costs.
In RP1, generation cost represent the largest shares in the system cost under electricity tariff determination, at 69.5%. The largest component in the generation cost is contributed by fuel, at 60%.
Similar trend is observed in RP2 whereby 69% from the total system cost forecasted in the electricity tariff is represent by generation cost, with the largest component in the generation cost is contributed by fuel at 44%.
Higher generation costs beginning the ICPT implementation in Regulatory Period 2 (RP2) were mainly contributed by the following:
- In RP2, fuel mix has been shifted from gas to coal, which is subject to market pricing. High price and tight supply of domestic gas has spurred the shift of generation towards coal. Coal make up as the largest mix at about 60% from the total generation mix in RP2.
- Increasing market coal prices and weakening of Ringgit. The impact of the weakening of Ringgit can be observed from Jan 2017 onwards, which further worsened the price of coal for the power sector. However, global coal price has fall below the baseline price set in RP2 starting from Q4 2019. This situation is foreseeable until end of RP2
Following the global fuel crisis that has prevailed since the end of 2021, coal prices for the RP3 period is expected to soar above the price set in the RP3 base tariff at USD79/MT. Given that coal is the main source of generation in Peninsular Malaysia, any rise in coal price above the base level will impact ICPT.
Since the commencement of RP3 in January 2022 to date, ICPT has been in a surcharge position following the rise in coal prices seen globally.
Under the implementation of the Imbalance Cost Pass-Through (ICPT) mechanism, the electricity tariff adjustment for Peninsular Malaysia consumers from 1 July to 31 December 2023, is as follows:
- Domestic consumers with a monthly electricity consumption of 1,500 kWh or below will not experience an increase in electricity tariff. This accounts for 99% of domestic consumers in Peninsular Malaysia.
- Non-domestic consumers in the low-voltage tariff category (Tariff B and D), specific agricultural tariffs (Tariff H, H1, and H2) will not experience an increase in electricity tariffs, and the ICPT surcharge at a rate of 3.7 sen/kWh will be maintained. In other words, Micro, Small, and Medium Enterprises (MSMEs) including restaurants, retail shops, bakeries, small workshops, farmers, livestock breeders, planters, and similar businesses will also not experience any increase in electricity tariffs.
- The new category of non-domestic consumers, namely water and sanitation operators in the states, will enjoy a reduction in surcharge rates from 20 sen/kWh to 3.7 sen/kWh. This means that water operators under the State Government will enjoy lower surcharges from July to December 2023. This decision is in line with the government's efforts to improve the capacity and capability of water operators in providing treated and clean water to consumers.
- Non-domestic consumers, specifically medium-voltage (MV) and high-voltage (HV) users from the industrial and commercial sector, will enjoy a reduction in surcharge rates from 20 sen/kWh to 17 sen/kWh.
In line with the government's intention as expressed in the National Economic Action Council (NEAC) meeting to implement targeted electricity subsidies starting from July 2023, domestic consumers using high levels of electricity, exceeding 1,500 kWh or equivalent to a minimum monthly electricity bill of RM708, will be subject to a surcharge of 10 sen/kWh.
It is estimated that approximately 83,000 consumers, which is 1% of domestic users, will experience a minimum monthly increase of RM187 (25%) in electricity bills. Although there is an increase for this category of domestic consumers, the government is still providing a special subsidy of RM58 million for this category since the ICPT surcharge is not fully waived. Consumers can see the amount of subsidy provided by the government in their respective monthly electricity bills.
The calculation and methodology of the ICPT mechanism are determined by Suruhanjaya Tenaga (ST) and are subject to the Government’s approval on a 6-monthly basis.
The quantum of the ICPT is calculated by comparing the actual generation costs (including fuel prices) against the reference generation costs (including fuel prices) set in the Base Tariff.
Find out how ICPT is being calculated here
Imbalance Cost Pass Through (ICPT) determination is a rigorous review process, which involves series of discussion, review, audit and approval. The process starts with the initiation of discussion and co-ordination with various main input provider from TNB, Single Buyer and Grid System Operator, and ends with submission to Suruhanjaya Tenaga for approval.
Imbalance Cost Pass Through (ICPT) is a charge that is applicable for every kWh of electricity consumed. It is a variable component in the electricity bill and is charged based on your consumption of electricity on a monthly basis.
Its calculation is based on the number of kWh consumed in a month multiplies by the ICPT rate (in sen/kWh). The ICPT charge will then be added to or subtracted from your current bill amount.
For the period of 1 July 2023 – 31 December 2023 the ICPT implementation is as follows:
- Domestic consumers with a monthly electricity consumption of 1,500 kWh or below will not experience an increase in electricity tariff. This accounts for 99% of domestic consumers in Peninsular Malaysia.
- Non-domestic consumers in the low-voltage tariff category (Tariff B and D), specific agricultural tariffs (Tariff H, H1, and H2) will not experience an increase in electricity tariffs, and the ICPT surcharge at a rate of 3.7 sen/kWh will be maintained. In other words, Micro, Small, and Medium Enterprises (MSMEs) including restaurants, retail shops, bakeries, small workshops, farmers, livestock breeders, planters, and similar businesses will also not experience any increase in electricity tariffs.
- The new category of non-domestic consumers, namely water and sanitation operators in the states, will enjoy a reduction in surcharge rates from 20 sen/kWh to 3.7 sen/kWh. This means that water operators under the State Government will enjoy lower surcharges from July to December 2023. This decision is in line with the government's efforts to improve the capacity and capability of water operators in providing treated and clean water to consumers.
- Non-domestic consumers, specifically medium-voltage (MV) and high-voltage (HV) users from the industrial and commercial sector, will enjoy a reduction in surcharge rates from 20 sen/kWh to 17 sen/kWh.
The ICPT charge on your electricity bill may differ from your neighbour's as the ICPT charge depends on your electrical consumption (kWh) in a month. Therefore, this amount varies from one customer to another, and from month to month, depending on the electrical consumption.
The RM40 Electric Bill Rebate Programme is a targeted government assistance program to finance monthly electricity bills of up to RM40 to those who are underprivileged and registered in the e-Kasih system. The program was announced by the Government in 2019 Budget Speech on 2nd November 2018.
This RM40 Electric Bill Rebate Programme is a new programme introduced starting from 1 January 2019. This programme replaces the RM20 Electric Bill Rebate Programme which ended in December 2018. From 1 January 2021 until 31 December 2021, this program will continue with "Miskin Tegar" only.
Eligibility for e-Kasih can be made at the Ministry of Natural Resources, Environment and Climate Change (NRECC) portal at semakanrebat.ketsa.gov.my or by contacting MyGCC at 03-8000 8000. Users can also check e-Kasih's eligibility by calling TNB Careline at 1-300-88-5454 or making a direct review at the nearby Kedai Tenaga.
For eligible e-Kasih users without TNB registered accounts, applications may be submitted to declare third-party accounts by filling in the application form at any of the nearest "Kedai Tenaga".
For users who are not eligible after the review is made and wish to register in the e-Kasih program, the user is required to refer to the Federal Development Office/Federal Development Department (PPPN/JPP), Implementation Coordination Unit, Prime Minister's Department (ICU JPM) in state level / District Development Unit. Data from e-Kasih is made by survey and registered by PPPN/JPP ICU JPM Offices at state level.
To apply for a RM40 Electric Bill Rebate, the user must submit the RM40 Rebate Application Form & a copy of the Identity Card as supporting document.
Customers are able to check the impact of ICPT on their electricity bills by using the ICPT calculator.
THE BENCHMARK FUEL PRICES IN BASE TARIFF
EFFECTIVE 1st JANUARY 2022 - 31st December 2024
COAL
USD79/MT
@ 4.123/USD
REGULATED GAS
Tier 1: RM26/mmBTU
Tier 2: RM33/mmBTU
FOREX
Weakening of RM against US$ will mean that the energy sector has to pay more for the same quantity of fuel that is imported. Imported coal and LNG prices are subjected to the currency exchange rate.
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