Energy, Green Technology and Water Minister Maximus Ongkili said the decision to maintain the rates was made by the cabinet on June 21.
This means that the average basic tariff rate in the peninsular will remain at 38.53 sen per kilowatt-hour (sen/kWh), and 34.52 sen/kWh in Sabah and Labuan.
In a statement today, Ongkili said the government also agreed to spend RM1.303 billion to cushion the impact of any increments in fuel and electricity generation costs on peninsular consumers during the period.
The amount will be funded through the PPA Savings Fund, whose proceeds are derived from the government’s renegotiation of power purchase agreements (PPAs) with first-generation independent power producers (IPPs).
Ongkili said the cabinet will provide a total power rebate of 2.54 kWh in Peninsular Malaysia, which consists of absorbing a fuel surcharge of 1.02 sen/kWh and providing a rebate of 1.52 sen/kWh, by utilising the PPA Savings Fund over the period.
The electricity tariff in Peninsular Malaysia is fixed through the Incentive-Based Regulation (IBR) framework via a mechanism called the Imbalance Cost Pass Through (ICPT), implemented since January 2014.
The ICPT mechanism allows power corporation Tenaga Nasional Bhd (TNB) to reflect changes, either increases or reductions, in fuel and other generation-related costs in the electricity tariff every six months.
Ongkili said the Energy Commission’s review of the electricity supply cost under the ICPT from January to June this year showed a cost increase of 1.02 sen/kWh.
He said this hike was caused by the rise in gas price from RM21.20 per MMBtu (million British Thermal Units) to RM22.70.
This necessitated the RM1.02 sen/kWh surcharge to consumers, he added. However, the cabinet decided not to pass it on to the public.
Meanwhile, consumers in Sabah and Labuan will receive special subsidies totalling RM468 million for 2017.
The cabinet agreed to maintain the electricity tariff rebate of 1.20 sen/kWh, while the average electricity tariff rate will remain at 34.52 sen/kWh.
Ongkili also said the adjustment of tariffs under the ICPT enabled consumers to enjoy total rebates of RM5.403 billion in peninsular Malaysia and RM196.26 million in Sabah and Labuan, from March 2015 to December 2017.
Rebates are given to all categories of power users in the peninsular, Sabah and Labuan except domestic consumers who use 33kWh and below per month.