KUALA LUMPUR (June 30): The electricity tariff surcharge for commercial and industrial users will be reduced from two sen per kilowatt-hour (kWh) to nil for the second half of 2020 (2H20) under the Imbalance Cost Pass-Through (ICPT) mechanism.

This means no surcharge will be imposed in 2H20 for both domestic and non-domestic users, the Energy Commission (EC) said in a statement today.

In 1H20, a surcharge of two sen per kWh was imposed on commercial and industrial users, while the electricity tariff for domestic users was without any surcharge.

The absence of the surcharge in 2H20 follows a reduction in real coal prices in 1H20.

To recap, the ICPT mechanism — part of the Incentive-Based Regulation — is a framework to adjust electricity tariffs in Peninsular Malaysia for the 2018-2020 period.

Under the mechanism, the EC determines an estimated cost for power-generation fuel, namely coal and gas.

The difference in the actual cost is then included in the tariff as a surcharge or rebate, which is reviewed and adjusted every six months depending on fuel costs and other generation costs in the preceding period.