Average Electricity Tariff
Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC) 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.
Since the implementation of IBR and ICPT in 2014, a total rebates and subsidies of RM 6.3 billion has been passed-through to customers.
The rebates implemented from March 2015 until June 2018 were made possible largely due to the savings derived from lower actual fuel prices (i.e. coal and LNG) as compared to base fuel prices in the electricity tariff.
The ICPT rebates implementation above affected all customers, except the domestic customers with monthly consumption of below 300kWh.
To cushion the impact of high fuel costs and and to maintain the ICPT surcharge at 1.52 sen/kWh, the Government has subsidized a total amount of RM2.2 billion (RM1.303 billion for July 2017 to December 2017, and RM0.929 billion for January 2018 to June 2018) by utilising the Kumpulan Wang Industri Elektrik “(KWIE”).
For period from 1 July 2018 to 31 December 2018, total imbalance cost passed-through is RM0.69 billion:
For period from 1 January 2019 to 30 June 2019, total imbalance cost passed-through is RM 1.82 billion:
For period 1 January – 30 June 2019 for the ICPT implementation:
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:
For this period (January – June 2020) of ICPT implementation, the Government has approved a reduction in ICPT surcharge from the current 2.55 sen/kWh to 2.00 sen/kWh. Lower ICPT surcharge is recorded due to minor reduction in actual fuel costs for period July to December 2019, although the actual fuel prices are still above the benchmark fuel prices set in the base tariff for Regulatory Period 2 (“RP2”) from 2018 to 2020. In addition, higher electricity demand has also contributed to the increase in fuel and associated generation costs for this period.
Details of the actual fuel prices for period July to December 2019 are as follows:
The above ICPT surcharge will be implemented on the average base tariff of 39.45 sen/kWh as follows:
Electricity customers will now have the ability to estimate future ICPT impact on their electricity bill using the ICPT Calculator available at www.myelectrictybill.my.
Please refer to ST’s website (http://www.st.gov.my/) for further details on the ICPT implementation.
The ICPT is a mechanism approved by the Government and implemented by 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. This mechanism is implemented according to Section 26 of Electricity Supply (Amendment) Act 2015. TNB also wishes to inform that the impact of ICPT implementation is neutral on TNB and will not have any effect to its business operations and financial position.
* domestic customers refers to residential customers
As of to-date, Government has utilized a total of RM2.6 billion, as a subsidy to cushion the impact of ICPT to consumer’s electricity bill. Details of the utilization are as follows:
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. The ICPT is only applicable to the energy charge component in the consumer’s bill except Domestic consumers with monthly consumption of 300kWh (RM77.00) & below
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.
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 government will increase household electricity bill subsidy from RM20 and below to RM40 and below, said Finance Minister Lim Guan Eng.
However, he said in line with the government's intention to implement targeted subsidies, the channeling of the subsidy would be dedicated to the poor and hardcore poor registered with the e-Kasih programme.
“It will benefit 185,000 accounts. An allocation of RM80 million is being set aside for this purpose,”
RM 14.47/mmBTU @ 4.212/USD
Jan '19 - Dec '20
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.More Info