KUALA LUMPUR (June 25): There will be no hike in electricity tariff in Peninsular Malaysia until the end of this year, following the latest review of the Imbalance Cost Pass-Through (ICPT).

In a statement today, the Energy, Green Technology and Water Ministry (KeTTHA) said the ICPT rebate of 2.25 sen per kilowatt-hour (kWh) for Peninsular Malaysia and 1.20 sen per kWh average downward revise of tariff for Sabah and Labuan will remain for the July 1 to Dec 31, 2015 period.

It added that the decision applies to all categories of consumers except for domestic consumers with monthly consumption of 300kWh and below.

Meanwhile, in line with the government’s initiative to rationalise power subsidy, the ministry has decided to increase the price of piped natural gas (PNG) in the peninsula by RM1.50 per million British thermal unit (MMBtu) to RM16.70 per MMBtu from RM15.20 per MMBtu from July 1, 2015.

“In other words, the increase of fuel price will not impact the electricity tariff and the said rebate will be able to continue, thanks to the RM1.08 billion cost saving from ICPT for January to June 2015 period,” KeTTHA said.

“This sum of amount also includes the RM300 million cost saving from the renegotiation of power purchase agreement with first generation independent power producers (IPPs),” it added.

ICPT is a mechanism implemented on Jan 1, 2014, which allows the government to pass excessive fuel costs to consumer, which in this case, the previous tariff hike was more than Tenaga Nasional Bhd needed due to falling coal prices and an improved generation mix.

KeTTHA said the cost saving in the peninsula also resulted from the higher usage of coal-fired power, where prices are relatively lower compared with fuel such as PNG and liquefied natural gas (LNG).

As ICPT is not implemented in Sabah and Labuan, KeTTHA said the federal government will continue subsidising the fuel cost and electricity tariff that are estimated to amount to RM685 million this year for these two areas.

“The government will continue to monitor the cost of fuel and other power generation cost until January 2016, when a new review will be conducted,” KeTTHA said.

As for Sarawak, KeTTHA said the power industry and electricity tariff are not under the ministry’s purview according to the Electricity Supply Act 1990.

Tenaga (fundamental: 1.3; valuation: 1.8) shares fell 22 sen or 1.72% to close at RM12.56 apiece today, with 13.38 million shares done. It has a market capitalisation of RM72.13 billion.

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