Domestic electricity users who consume more than 1,500 kilowatt hour (kWh) per month will need to pay an electricity tariff surcharge of 10 sen/kWh, starting from July until December 2023. This comes as the government begins implementing an updated imbalance cost pass-through (ICPT) mechanism that better reflects its targeted subsidy agenda for the second half of 2023 (2H23).
With this, these high electricity consumption domestic users – whose current bill exceeds RM708 per month – will no longer be able to enjoy the 2 sen/kWh rebate that was provided to all domestic users prior to this. Instead, their monthly electricity bill may see a minimum increase of RM187. This is expected to affect only 1% of the total domestic users, equivalent to 83,000 households – with a majority of them living in Selangor, Kuala Lumpur, Johor, and Penang.
Meanwhile, other domestic users who consume less than 1,500 kWh per month will continue to enjoy the existing 2 sen/kWh rebate.
As for non-domestic consumers, the surcharge for those in the low-voltage category (such as MSMEs and SMEs) will remain unchanged at 3.7 sen/kWh. Water and sewerage operators will also be allowed to enjoy this surcharge rate of 3.7 sen/kWh, down from the rate of 20 sen/kWh that they had to pay during the first half of 2023 (2H23).
Similarly, medium- and high-voltage power users will also see a slight decrease in the surcharge that they need to pay in 2H23, reduced from the original 20 sen/kWh to 17 sen/kWh. The government explained that this is because fuel costs have gradually reduced since last year. With this, non-domestic medium- and high-voltage users will see a 28% to 35% decrease in their monthly electricity bills.
In announcing the new electricity tariff, Minister of Natural Resources, Environment, and Climate Change Nik Nazmi Nik Ahmad acknowledged that the new 10 sen/kWh surcharge for high-consumption domestic users will affect those with high electricity usage and not necessarily those in the high-income group, but it is still a start. He also clarified that the higher tariff is only imposed when a household’s consumption for a particular month surpasses 1,500 kWh; if that same household’s consumption does not exceed 1,500 kWh for the following month, they will once again get to enjoy the 2 sen/kWh rebate.
Nik Nazmi further highlighted that despite the imposition of the higher tariff for high-consumption domestic users, the government has not actually completely removed the subsidy for this category. A total of RM58 million is still being allocated to subsidise this 1% of domestic users as the ICPT rate is higher still.
To note, domestic users have been enjoying the blanket 2 sen/kWh rebate since January 2021, and this latest development marks the end of it. Meanwhile, non-domestic users were also allowed to enjoy the 2 sen/kWh rebate for the first half of 2021 (1H21), but were subsequently required to pay a surcharge of 3.7 sen/kWh starting from July 2021 until December 2022. Following that, the government implemented a targeted electricity tariff on non-domestic users in the first half of 2023 (1H23).
(Sources: The Edge Markets, Malay Mail)
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