No electricity tariff hike from July 1

There will be no electricity tariff hike in Peninsular Malaysia, Sabah and the Federal Territory of Labuan under the Imbalance Cost Pass-Through (ICPT) review period from July 1 to Dec 31, 2015, says the Energy, Green Technology and Water Ministry.

The decision not to raise the tariffs under the Imbalance Cost Pass-Through (ICPT) review period was made at a Cabinet meeting on Wednesday, the ministry said in a statement on Thursday.

The ICPT rebate of 2.25 sen/kWj for Peninsular Malaysia and the reduction of the tariff by an average of 1.20 sen/kWj for Sabah and the Federal Territory of Labuan will remain, it said.

The decision covers all categories of consumers except domestic consumers who use 300/kWh monthly and below who are not affected by the last tariff increase on Jan 1, 2014.

In line with the government's subsidy rationalisation move, the price of piped natural gas in the peninsula will go up by RM1.50/MMBtu, from RM15.20/MMBtu to RM16.70/MMBtu, effective July 1, 2015.

However, the fuel's higher price will not affect the electricity tariff and the rebate will be maintained with the ICPT savings of RM1.085.67 million for the January to June 2015 period.

The amount does not include the RM300 million savings from the review of the Power Purchase Agreement (PPA) with first-generation Independent Power Producers.

The ICPT mechanism, implemented since Jan 1, 2014 in the peninsula, allows a review of electricity tariffs every six months, taking into account changes in the prices of piped natural gas, liquefied natural gas (LNG), coal, Medium Fuel Oil and distillates.

Other costs considered include costs related to the PPA, displacement costs related to renewable energy, and the cost of purchasing electricity abroad.

The ICPT savings were also contributed by greater usage of coal, which is cheaper than piped natural gas and LNG, efficiency enhancements of coal-fired power stations, and lower electricity demand from the beginning to the middle of this year.

The implementation of the ICPT mechanism will not affect Tenaga Nasional Bhd's business operations and financial position.

For Sabah and the Federal Territory of Labuan, the decision to retain the tariff subsidy of 1.20 sen/kWh for all categories of consumers except domestic consumers using 300/kWh or less monthly.

The ICPT mechanism is not implemented in Sabah and the Federal Territory of Labuan, and the fuel subsidy and electricity tariff subsidy, totaling an estimated RM685 million this year for Sabah and the Federal Territory of Labuan, will be retained.

The implementation is not expected to affect Sabah Electricity Sdn Bhd (SESB). In Sarawak, the utility industry, including tariff-related issues, are not regulated by the ministry under Section 1(2) of the Electricity Supply Act 1990 (Act 447).