KUALA LUMPUR (June 24): Tenaga Nasional Bhd (TNB) on Friday (June 24) announced that the imbalance cost pass-through (ICPT) mechanism will continue to be implemented for the period of July 1 until Dec 31, 2022.
This follows the government’s decision to maintain the electricity and water tariff in Peninsula Malaysia, as announced by Prime Minister Datuk Seri Ismail Sabri Yaakob earlier in the day.
In a bourse filing, TNB said the decision will address the significant increase in generation costs due to the higher fuel prices used for the supply of electricity during the period of Jan 1 to June 30, 2022.
“TNB also wishes to inform that the impact of the ICPT implementation is neutral on TNB and will not have any effect on its business operations and financial position,” said.
The government had in January announced an electricity tariff surcharge of 3.7 sen per kilowatt hour (kWh) for non-domestic users for the February to June 2022 period, while maintaining a two sen rebate for domestic users.
The status quo in the electricity tariff surcharge in 2H22 comes with government commitment to bear subsidies amounting to RM5.8 billion, amid the sharp increase in fuel and other generation costs.
However, the prime minister did not elaborate on how the subsidy is going to be funded.
The government was widely expected to increase electricity surcharge for 2H22 through a semi-annual revision under the ICPT mechanism, given the elevated prices of coal, which constitutes over half of Peninsula Malaysia's electricity generation mix.
International coal prices have nearly doubled from a year ago, with spot coal prices in Indonesia — Malaysia's largest supplier — trading at US$320/MT in June.
TNB’s share price settled three sen or 0.37% higher at RM8.19 on Friday, bringing it a market capitalisation of RM46.9 billion.