FMM cries foul over electricity surcharge

FMM president Soh Thian Lai says business owners will have to brace themselves for higher-than-usual electricity bills. (Bernama pic)

KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) is crying foul over the recent electricity surcharge, saying it came with such short notice that industry players, especially exporters, had insufficient time to adjust to the additional cost.

Soh Thian Lai

Its president Soh Thian Lai said business owners, especially exporters whose contract terms had been agreed upon earlier, would need to brace themselves for higher-than-usual electricity bills following the implementation of the Imbalance Cost Pass-Through (ICPT) mechanism.

“The ICPT should have been moderated to take into consideration the recent natural gas price increase by removing the rebate without imposing any surcharge.

“The increase in electricity cost to the manufacturing sector is estimated to be higher than 6% in view of the rebate enjoyed in the previous six months,” he told Bernama.

On Friday, Tenaga Nasional Bhd announced that beginning July 1, 2018, commercial customers and businesses have to pay a surcharge of 1.35 sen/kWh due to higher fuel and generation costs.

It explained the average base tariff remain unchanged at 39.45 sen/kWh.

However, due to the higher fuel and generation costs from January to June 30, 2018, the additional cost of RM698.19 million or 1.35 sen/kWh ICPT surcharge, will be passed through via the ICPT mechanism.

However, household customers with monthly consumption below 300/kWh will be unaffected.

The ICPT mechanism enables TNB to pass on a change in the fuel and generation costs to consumers’ electricity tariff every six months.

Asked on the absolute impact, Soh said it would vary according to the tariff category and electricity consumption of each individual company and urged the government to maintain electricity tariff at this present time due to many existing regulatory cost burdens.