KUALA LUMPUR: New electricity tariff will depend on the next review by the Energy Commission while coal and gas prices through the imbalance cost pass through (ICPT) mechanism will likely be maintained, says TNB CEO Amir Hamzah.
"We understand the electricity tariff is affected by fuel prices. Ultimately, the movement of the tariff will depend on where the coal and gas prices are. Some trending of coal prices are seen but gas prices are still adjusting towards market price.
"So, there are two opposing forces moving at this point of time and hopefully in the next review, the EC will take both into account and we will see what happens then.
"We believe that we will still maintain the ICPT as we see it as a fair mechanism that can induce investments back into the business," he said.
Amir said the sustainable ecosystem afforded by the Incentive-Based Regulation (IBR) framework and the Imbalance Cost Pass-Through (ICPT) mechanism implemented for the last four years have resulted in Malaysia having one of the most reliable energy networks in the region, in par with other advanced countries.
Further, the national utilities company noted that preparatory works are already underway to gear the company for the Third Regulatory Period (RP3) (2021-2023) and upon receiving the endorsement from the management team and approval from the Board.
The company expects IBR RP3 proposal to be submitted to the EC by December 2019.
In December last year, the government has given approval for TNB to continue implementing the ICPT mechanism by first half of this year.
However, the average base tariff would remain unchanged for the period from until June 30, 2019 despite the higher fuel and generation cost incurred for the period of July 1 until Dec 31, 2018.
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