KUALA LUMPUR (Dec 24): Tenaga Nasional Bhd (TNB) has announced an electricity rebate of two sen per kilowatt hour (kWh) for domestic and industrial users for the first half of 2021.

"Beginning from Jan 1, 2021 until June 30, 2021, the government has approved an ICPT (Imbalance Cost Pass-Through) rebate of two sen/kWh for all customers including domestic customers with monthly consumption of 300kWh and below.

"This ICPT rebate is a result of a reduction in actual fuel costs for the period of July to December 2020, consistent with the reduction in actual coal and gas prices for the power sector," TNB said in a filing with Bursa Malaysia yesterday.

The ICPT is a mechanism which allows TNB to reflect changes in fuel and generation costs in consumers' electricity tariff every six months. It has been implemented by the Energy Commission since 2014 as part of a wider regulatory reform called the Incentive Based Regulation (IBR).

TNB said the government has approved a one-year extension of the Secondary Regulatory Period (RP2) of the IBR for 2021.

"Beginning Jan 1, 2021, the current base tariff of 39.45 sen/kWh and the Electricity Tariff Schedule are maintained and will continue to be applicable until Dec 31, 2021. Any variations in the fuel costs will be addressed via the ICPT mechanism," said TNB.

Following the extension, the company said RP3 is shifted by one year to start on Jan 1, 2022 and to end on Dec 31, 2024.

"This decision was made following the uncertainty in demand outlook for 2021 and the instability of the current global fuel markets following the Covid-19 pandemic," it added.

TNB said ICPT's current average base tariff of 39.45 sen/kWh will be maintained. It added that any variation in the fuel costs will be addressed via the ICPT mechanism.

Any shortfall or excess in the ICPT will be funded or transferred to customers via Kumpulan Wang Industri Elektrik fund to aid in the stabilisation of electricity tariff in the future via gradual build-up of the fund.

TNB also said that the impact of ICPT implementation is neutral on the company, and will not have any effect on its business operations and financial position.

TNB's share price rose 10 sen or 0.95% to RM10.68, yesterday with a market capitalisation of RM60.93 billion. There were 1.65 million shares traded. Year-to-date, the stock has fallen 20% from RM13.3 on Jan 2.

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