PUTRAJAYA, Dec 14 — No electricity surcharge will be levied on domestic users in Peninsular Malaysia from January 1 to June 30, 2019, although the government agreed to continue implementing the imbalance cost pass-through (ICPT) mechanism during this period, says the Energy Commission (EC).

The commission said this followed the government’s decision to use the Electricity Industry Fund (KWIE) to fund the surcharge for domestic users amounting to RM308 million to cushion the impact of the increase in the ICPT surcharge on consumers.

"The basic tariff rate remains at 39.45/kilowatt-hour (kWh),” it said in a statement today.

However, the EC said the government had decided to continue implementing the ICPT surcharge mechanism for commercial and industrial users in stages by maintaining the surcharge at the current rate of 1.35 sen/kWh from Jan 1, 2019 to Feb 28, 2019.

"From March 1 to June 30, 2019, the ICPT surcharge will be 2.55 sen/kWh,” it said.

The EC said the surcharge pass-through in stages for non-domestic users was implemented following a review on the ICPT mechanism for July 1, 2018, to December 31, 2018, which showed an increase in fuel and generation costs of RM1.8 billion, or 3.43 sen/kWh.

It said factors contributing to the increase in costs included the rise in average coal price to US$97.835 per tonne against the forecasted coal price of US$75 per tonne set in the Incentive-Based Regulation’s (IBR) base tariff for Regulatory Period 2 (RP2) from 2018 to 2020.

Meanwhile, part of the ICPT surcharge for non-domestic customers amounting to RM564 million would be funded from cost and revenue adjustment of Tenaga Nasional Bhd for 2018, as agreed during the base tariff determination in RP2 under the Incentive Based Regulation (IBR) framework

"Therefore, the remaining imbalance cost to be passed-through via the ICPT mechanism was RM948 million,” it said.

The EC said the surcharge pass-through in stages was implemented after taking into consideration the views from industry stakeholders who raised the issue that the government constantly made announcements on imposing electricity surcharge at the last moment which resulted in affected companies facing challenges in financial planning.

"The pass-through in stages is expected to give companies sufficient leeway to make more effective financial planning,” it added. — Bernama