KOTA KINABALU: Consumers may expect higher product prices with the Energy Commission’s (EC) decision to introduce a surcharge for high-consumption households under the latest imbalance cost pass-through (ICPT) adjustment.
Stressing that the adjustment would affect especially the industry players, KKIP Power Sdn Bhd Chairman Datuk Dr Joseph Lee Han Kyun expressed disappointment over the decision, and likened it to EC’s farewell gift to electricity consumers in Sabah and Labuan.
“The decision affects industry players as well, and it would lead to higher product prices or inflation as they pass the cost to consumers.
“It seems that it is a farewell gift to electricity consumers in Sabah and Labuan before they (EC) officially hand over the regulatory power to the State Government on Jan 3 next year, which is just about a week away,” said Lee, in a statement recently.
He expressed great disappointment that such a ‘gift’ virtually represents a 242 per cent jump in ICPT surcharge rates to all electricity consumers taking electricity supply at medium voltage and above, which cover the majority of industrial players relatively of small or medium scales in the national context, and almost all shopping malls and hotels, to mention some, both in Sabah and neighbouring Labuan.
“Such a steep increase by three folds from 2.11 cents per kWh to 7.21 cents per kWh is certainly a surprise gift to consumers in the state and Labuan; and needless to say, it will offer solid ground to trigger for a chain of subsequential price increases in all sectors from construction and tourism industries, retail businesses, restaurants and even at kedai kopi (coffee shops). This would also lead to an increase in management fees, thus burdening tenants in those affected commercial complexes.
“On the other hand, households consuming about 1,500kWh per month, or pay monthly electricity charges of about RM618 per month, will need to be ready because once they touch just a kWh more, they too are subjected to the ICPT surcharge of 7.21 sen per-unit kWh,” he said.
Households with consumption below the threshold will see no change in their tariffs, as they will remain without any surcharge imposed.
Concurring with the Federation of Malaysian Manufacturers (FMM) on the appeal that the determination of ICPT rates is against the fundamental principle of Incentive-Based Regulation that linked the ICPT surcharge rates with the world energy prices, Lee said that it has been in the downward trends in the past six months period.
The FMM criticised the Government’s decision to maintain the non-domestic ICPT surcharge rates in Peninsular Malaysia, rather than lowering them based on the world energy prices.
Lee also concurred with the appeals made by FMM that determining the ICPT surcharge rates should be more transparent in future.
“I hope that once the regulating power is taken over by the Energy Commission of Sabah (ECoS) next year, the matter can be made more transparent to involve more locally grown industries and more relevant stakeholders.”
Lee added that with the great number of standalone mobile generating sets running statewide burning high-grade fossil fuels due to the shortfall of generation reserve capacity in the State over the past six-month period, there might be some explanation to see an increase in ICPT surcharge rates in Sabah.
Still, the decision on the rate of increase must be transparent to the public.
In this respect, Lee stressed that the Sabah Electricity (SESB) owes an answer to the public when they can see lights at the end of the tunnel.
Based on SESB’s previous statements, Lee said that none of the ongoing generation projects like the Large Scale Solar, Battery Storage System, nor the recently launched Upper Padas Hydro Project, will be the long-term solution to help to levelise or rationalise the production cost of electricity in Sabah in the foreseeable future.
The adjustment follows last Friday’s announcement by the EC on the introduction of a surcharge for high-consumption households under the latest imbalance cost pass-through (ICPT) adjustment, in line with the government’s ongoing efforts to ensure subsidies are more targeted.
Around 99 per cent of users in Sabah, Labuan and KHTP are not affected by the latest adjustments, the EC said.
Around RM161.7 million is earmarked to fund the electricity subsidies for users in Sabah and Labuan for 1H2024, on top of another RM730,000 for KHTP consumers, it added.
