Friday 26 January 2024

Impact of Electricity Tariff Adjustment

The electricity tariff was increased for 1.2 million households from 1 Jan 2024. This is expected to influence the country's inflation rate and contribute to a marginal increase in the cost of living.

From Jan 1, approximately 1.2 million households with a monthly electricity bill of at least RM220 will experience a rise in their bills by 4.2 to six per cent. This adjustment is part of the government's strategy to implement the so called targeted subsidies. As a result, affected households should anticipate an additional monthly expenditure ranging from RM12 to RM32 for electricity.


Source: https://en.wikipedia.org

The government anticipates savings of RM266.2 million in subsidies through this measure.

The Energy Transition and Public Utilities Ministry's announcement specifies that domestic consumers using 601 to 1,500 kilowatt-hours (kWh) per month will no longer qualify for the two-sen per kWh rebate under the Imbalance Cost Pass-Through (ICPT) mechanism from Jan 1 to June 30, 2024.

The recent tariff adjustments supposedly would leave a majority of electricity consumers - 85 per cent - in Peninsular Malaysia, unaffected. Users with electricity consumption up to 600kWh or a bill of RM219.80 and below will continue to enjoy a two-sen per kWh rebate.

The government will still pay out subsidies of RM1.9 billion to maintain the status quo for the 85 per cent. Meanwhile, the RM40 Electricity Bill Rebate Programme for the hardcore poor will continue in 2024.

The ministry also encouraged consumers to explore solar options for personal use or joining the Net Energy Metering 3.0 (NEM 3.0) Programme. In line with these efforts, the Sustainability Achieved via Energy Efficiency (SAVE) 4.0 Programme initiative has been introduced, offering e-rebates for the purchase of energy-efficient equipment with a rating of 4 and 5 stars. This programme aims to incentivise the adoption of environmentally friendly appliances, further aligning the nation with global sustainability goals.

The cost of these devices ranges from RM10k to RM20k. If TNB/Government could subsidise 50% then there will be takers. TNB benefits, because it does not have to invest in new power plants and indirectly will promote “Green” energy. So, how about a one-time subsidy for residential solar panels?


Reference:

Electricity tariff adjustment: Expert says households will need to go bigger on energy efficient appliances, S. Birruntha, New Straits Times, 22 December 2023



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