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
- Rebate from the government for customers with monthly bill of RM20 or below is effective until December 2018. From 2019, targeted subsidy is implemented whereby RM40 electricity subsidy is given to those registered under the eKasih program.
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 Energy and Natural Resources (KeTSA) 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.
Rebates in RP1
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.
- For period from 1 March 2015 to 30 June 2015, and from 1 July 2015 to 31 December 2015, a total of RM 1.81 billion is passed-through to the consumers in the form of rebate of 2.25 sen/kWh.
- For period from 1 January 2016 to 30 June 2016, 1 July 2016 to 31 December 2016, 1 January 2017 to 30 June 2017, 1 July 2017 to 31 December 2017, 1 January 2018 to 30 June 2018, a total of RM 4.51 billion is passed-through to the consumers in the form of rebate of 1.52 sen/kWh.
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).
Rebates in RP2
Beginning from 1 January 2021 until 30 June 2021, the Government has approved an ICPT rebate of 2.00 sen/kWh for all customers including domestic customers with monthly consumption of 300kWh and below.
This ICPT rebate is a result of a reduction in actual fuel costs for the period of July to December 2020, consistent with the reduction in actual coal and gas prices for the power sector.
The following are the details of the actual fuel prices for the period of July to December 2020:
- Lower average coal price in the global market at USD58.6/MT, compared to the benchmark coal price set in the base tariff at USD75/MT; and
- Lower power sector gas price at RM 21.0/mmbtu, compared to the benchmark gas price set in the base tariff of RM27.20/mmbtu.
Any shortfall or excess in the ICPT will be funded or transferred to customers via Kumpulan Wang Industri Elektrik (KWIE) fund to aid in the stabilisation of electricity tariff in the future via gradual build-up of the fund.
For Period from 1 July 2021 – 31 December 2021 total imbalance cost passed-through is RM 1.1 billion
For the period 1 July to 31 December 2021, the cost of ICPT that needs to be adjusted is RM638.98 million. This means that the electricity rebate rate that can be released to consumers is 1.13 sen/kWh compared to the rebate rate for the period January to June 2021 which is 2.00 sen/kWh. The increase in ICPT costs occurred due to the increase in the cost of gas and coal supply for the period January to June 2021.
However, taking into account the challenges and difficulties faced by the people following the implementation of the Movement Control Order enforced to curb the spread of the Covid 19 pandemic, the Government has agreed to fund an additional rebate of 0.87 sen/kWh involving an allocation of RM493 million through Kumpulan Wang Industri Elektrik (KWIE). Therefore, all Tenaga Nasional Berhad (TNB) account holders, which are estimated at 9.44 million consumers, will continue to enjoy an electricity rebate of 2.00 sen/kWh for the period 1 July to 31 December 2021.
This ICPT rebate is a result of overall reduction in actual generation costs for the period of January to June 2021.
Details of the actual fuel prices for period January to June 2021 are as follows:
- A slight increase of average coal price in the global market at USD 70.06/MT, as compared to the benchmark coal price set in the base tariff at USD 67.45/MT.
- Starting from January 2020, the gas price is set based on Reference Market Price (RMP), replacing the former two-tier gas pricing mechanism which comprises of Regulated Gas Price and LNG Price. For period January to June 2021, the average RMP price is RM 17.16/mmBTU which is lower than the benchmark gas price for the year set in the base tariff at RM 27.20/mmBTU.
Any shortfall or excess in the ICPT will be funded or transferred to customers via Kumpulan Wang Industri Elektrik (KWIE) fund to aid in the stabilisation of electricity tariff in the future via gradual build-up of the fund.
Surcharge in RP2
For period from 1 July 2018 to 31 December 2018, total imbalance cost passed-through is RMo.69 billion:- To cushion the ICPT surcharge impact to the customers, the Government has approved mitigation measures amounting to RM 114 million from KWIE to fund the surcharges for the domestic
- This reduces the imbalance costs to be passed-through to RM0.58 billion, which is passed-through to the non-domestic customers via a 1.35 sen/kWh surcharge
- To cushion the ICPT surcharge impact to the customers, the Government has approved mitigation measures amounting to RM 872 million from the following sources:
- Annual Regulatory Adjustment of RM 564 million; and
- Utilising RM 308 million from KWIE to fund the surcharges for the domestic customers
- This reduces the imbalance costs to be passed-through to RM 0.95 billion, which is passed-through to the non-domestic customers via a 1.35 sen/kWh surcharge (Jan – Feb 2019) and 2.55 sen/kWh (Mar – Jun 2019).
- The surcharges from July 2018 to December 2019 is due to higher fuel and generation costs derived from higher fuel prices (i.e. coal) as compared to base fuel prices in the electricity tariff.
- To cushion the ICPT surcharge impact to the customer, the Government has approved mitigation measures amounting to RM 314.44 million from following sources:
- Annual Regulatory Adjustment of RM 336.70 million and;
- Utilising RM 7.44 million from KWIE to fund the surcharges for the domestic customers
- This reduces the imbalance costs to be passed-through to RM 1.24 billion, which will be passed-through to the domestic customers with the consumption of above 600 kWh and non-domestic customers, via a 2.55 sen/kWh surcharge for the period Jul 2019-December 2019.
- Any future ICPT rebate/surcharge is dependent on the changes in global fuel prices, which will be reviewed every 6 months.
Details of the actual fuel prices for period January to June 2020 are as follows:
- Average Applicable Coal Price is at USD69.5/MT;
- Starting from January 2020, the gas price is set based on Reference Market Price (“RMP”), replacing the former two-tier gas pricing mechanism which comprises of Regulated Gas Price and LNG Price. For period January to June 2020, the average RMP price is RM26.60/mmBTU.
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
Beginning from 1 July 2021 until 31 December 2021, the Government has approved an ICPT rebate of 2.00 sen/kWh for all customers including domestic customers with monthly consumption of 300kWh and below.
This ICPT rebate is a result of an overall reduction in actual generation costs for the period of January to June 2021.
Details of the actual fuel prices for period January to June 2021 are as follows:
- A slight increase of average coal price in the global market at USD 70.06/MT, as compared to the benchmark coal price set in the base tariff at USD 67.45/MT.
- Starting from January 2020, the gas price is set based on Reference Market Price (RMP), replacing the former two-tier gas pricing mechanism which comprises of Regulated Gas Price and LNG Price. For period January to June 2021, the average RMP price is RM 17.16/mmBTU which is lower than the benchmark gas price for the year set in the base tariff at RM 27.20/mmBTU.
Any shortfall or excess in the ICPT will be funded or transferred to customers via Kumpulan Wang Industri Elektrik (KWIE) fund to aid in the stabilisation of electricity tariff in the future via gradual build-up of the fund.
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.
Government fund via Kumpulan Wang Industri Elektrik (KWIE) was created and enforced on 1st January 2016 is a fund administered by Suruhanjaya Tenaga (Energy Commission). The objective of it is to manage and cushion the impact of electricity tariff to the customers. Not only that, KWIE can also function to buffer electricity prices at times of financial crisis.
Suruhanjaya Tenaga as Malaysia's energy regulator determines the calculation and methodology of the ICPT, subject to Government approval on a 6-month 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. 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.
For period January to June 2021, the ICPT rebate is set at 2.00 sen/kWh that will be applicable for both Domestic and Non Domestic Customers.
Domestic customers with monthly consumption of 300kWh (RM77.00) will also be eligible for the ICPT rebate at a rate of 2.00 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 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,”
Bill Impact Analysis
Rebate of 2.00 sen/kWh (All Customers)
Note:
- Bill impact analysis for all customer is done based on comparison from the last ICPT implementation (i.e. -2.00 sen/kWh of ICPT). For domestic customer, the last ICPT implementation includes consumption below 300kWh.
- MV and HV customers bill impact is based on random sampling.
- The numbers of customers are based on BCRM as of Dec 2020.
THE BENCHMARK FUEL PRICES IN BASE TARIFF
EFFECTIVE 1st JANUARY 2018
COAL
USD75/MT
RM 14.47/mmBTU @ 4.212/USD
LIQUEFIED NATURAL GAS
RM35/mmBTU
REGULATED GAS
RM27.20/mmBTU
Jan '19 - Dec '20
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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