KUALA LUMPUR (June 28): Tenaga Nasional Bhd (TNB) said today the government had decided to maintain the imbalance cost pass-through (ICPT) rebate of two sen/kWh for all customers including domestic users with monthly electricity consumption of 300kWh and below from July 1 to Dec 31, 2021 after taking into account the overall reduction in actual power generation cost from January to June 2021.
In a filing today with Bursa Malaysia, government-controlled utility TNB said any shortfall or excess in the ICPT will be funded or transferred to customers via the Kumpulan Wang Industri Elektrik (KWIE) fund to aid in stabilisation of electricity tariffs 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 on its business operations and financial position,” TNB said.
According to TNB’s website, the ICPT is a mechanism under the incentive-based regulation (IBR) framework which allows TNB as a utility to reflect an increase or reduction in fuel and other generation-related costs in electricity tariffs every six months in the form of a rebate or surcharge.
TNB said that between January and June 2021, the average base tariff for electricity remained unchanged at 39.45 sen/kWh.
"Domestic customers refer to residential customers, while non-domestic customers refer to commercial, industrial customers and others,” the company said.
Today, TNB said in the Bursa filing that for the period of January to June 2021, there was a slight increase in the average coal price in the global market at US$70.06 (about RM290.57) a tonne compared to the benchmark coal price set in the base tariff at US$67.45 a tonne.
"Starting from January 2020, the gas price is set based on the reference market price (RMP), replacing the former two-tier gas pricing mechanism which comprises the regulated gas price and LNG (liquified natural gas) price.
"For period [of] January to June 2021, the average RMP was RM17.16/MMBtu, which was lower than the benchmark gas price for the year set in the base tariff at RM27.20/MMBtu,” TNB said.
Prices of thermal coal, which is used in electricity generation, had recently risen to a record high.
It was reported on June 18, 2021 that physical prices of thermal coal in the 5,500 kilocalorie/kilogramme grade had been hovering around 900 yuan (US$139.63 or about RM578.46) per tonne since early May, a record high.
"[The soaring prices] have added a burden on downstream sectors, and are having a negative effect on the development of the real economy,” China's National Development and Reform Commission (NDRC) was quoted as saying by Reuters.
It was reported that coal-fired power plants, bearing the brunt of the price spike as major thermal coal users, are rushing to build up inventories ahead of peak summer demand.
"The [Chinese] government will closely monitor commodity prices ... get to know the operation situation at relevant market participants, check abnormal trading and speculation, as well as crack down on hoarding and driving up prices," the NDRC was quoted as saying in a statement.
At Bursa’s 12:30pm break today, TNB’s share price had slipped four sen or 0.4% to RM9.86, which gave the company a market capitalisation of about RM56.2 billion. TNB has 5.7 billion issued shares.