FMM Welcomes No Change In Icpt Surcharge, Calls For Time To Adjust To New RP4 Tariff

KUALA LUMPUR, Dec 21 (Bernama) -- The Federation of Malaysian Manufacturers (FMM) welcomes the government’s decision to maintain the Imbalance Cost Pass-Through (ICPT) surcharge at 16 sen per kilowatt hour (kWh) for the first half of 2025.

“The next six months would be crucial as the global market prepares for the policy changes under the United States President-elect Donald Trump’s administration and the geopolitical uncertainties, especially in the Middle East, would continue to pose risk on energy price volatility as the conflict prolongs,” said its president Tan Sri Soh Thian Lai in a statement today.

Yesterday, the Ministry of Energy Transition and Water Transformation (PETRA) announced that there will be no increase in electricity tariffs for all electricity users in Peninsular Malaysia with the implementation of the ICPT from Jan 1 to June 30, 2025.

On June 29, PETRA announced that the rebate of two cents/kWh would be maintained for 6.9 million domestic consumers under 600 kWh, no change for 1.3 million consumers under 1,500 kWh, and a rebate of 10 cents/kWh for 85,000 consumers over 1,500 kWh.

The government also agreed with the setting of the average basic electricity tariff rate in the Peninsula for Tenaga Nasional Bhd (TNB) under the framework of Incentive Based Regulation (IBR) for the Fourth Regulatory period (RP4) starting from Jan 1 to Dec 31, 2027, whereby the new tariff schedule is proposed to be implemented on July 1, 2025.

On that, Soh said a dialogue with industry stakeholders should be carried out before the implementation of the new tariff.

“The announcement of the new tariff schedule should be made at least three months before implementation to give sufficient time for the industry to make the necessary adjustment in their operations,” he said.

Soh added that the tariff review, while addressing the revenue-cost structure mismatch as the country moves towards energy transition and third-party access arrangement, must also ensure that the industrial tariff rate remains competitive and attractive in the region. 

Meanwhile, he said FMM had previously requested for the small and medium-sized enterprises (SMEs) under the medium voltage category to be given due consideration to qualify for a lower surcharge similar to the rate given to the water services sectors at 3.7 sen per kWh. 

“The continued high surcharge environment would not be tenable for SMEs to remain competitive in the long run, as they would also be adjusting the implementation of the new minimum wage by Feb 1, 2025,” he said.

-- BERNAMA