KUALA LUMPUR: The current electricity tariff will be maintained until June 2015, said Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili.

The government will also defer increasing the price of piped gas, which means Petroliam Nasional Bhd (Petronas) will have to forego RM836 million in revenue from July this year to June 2015, he said.

“To ensure the tariff is maintained up till June 2015, the government will manage [absorb] the cost of RM1.683 billion for fuel and generation costs by using savings generated through the renegotiated power purchase agreements with the first generation independent power producers and maintaining the current price of piped gas supplied by Petronas to the electricity sector,” he said.

The electricity tariff in Peninsular Malaysia is determined through the incentive-based regulation framework and the imbalance cost pass-through (ICPT) mechanism implemented in January 2014, he said. The ICPT allows the government to review the tariff every six months based on changes in costs.

Ongkili said the ICPT cost from January to June was RM465.93 million, while the cost from July to December is RM382.03 million, totalling RM847.96 million for this year or an increase in tariff rate by 1.62 sen/kWh. —

This article first appeared in The Edge Financial Daily, on November 6, 2014.