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FMM criticises govt for maintaining non-domestic ICPT rates

FMM In The News: FMT, PETALING JAYA, December 23, 2023 - The Federation of Malaysian Manufacturers (FMM) has criticised the government’s decision to maintain the surcharge rate for electricity at 17 sen/kWh for non-domestic users under the imbalance cost pass through (ICPT) mechanism.

FMM president Soh Thian Lai said the group had expected a reduction in ICPT surcharge rate following the overall declining trend in global fuel prices this year and the six-month lag. 

“A small reduction would still have been welcomed by industries,” he said in a statement.

Soh lamented the lack of engagement between the government and the industry prior to the announcement, calling for more details to be made available on the decision to maintain the surcharge at the current rate.

He said there was a need for consistent engagement with the industry to address concerns and challenges related to the electricity tariff rate, particularly during periods of high ICPT surcharge rates.

This is especially crucial for small and medium-sized industries (SMIs) falling under the medium voltage (MV) category.

“There should be more robust customer profiling to review the eligibility of SMIs under the MV category for them to qualify for a lower surcharge rate as they continue to operate under a challenging environment due to economic uncertainties in 2024,” he added.

Yesterday, the Energy Commission announced its new electricity tariffs for the Jan 1 to June 30 period. It said 85% of domestic consumers in Peninsular Malaysia, or seven million users, would not be affected by the new adjustments.

The commission said this followed the government’s decision to maintain the rebate of 2 sen/kWh for users with a monthly electricity consumption of 600kWh and below.

Non-domestic users under the commercial and industrial low-voltage tariff category (tariff B and D), specific agricultural tariffs (tariff H, H1 and H2), and water and sanitation operators will not experience an increase in the electricity tariff, with the surcharge maintained at 3.7 sen/kWh.

For other non-domestic consumers, the surcharge rate, however, remains at 17 sen/kWh.

ICPT is a mechanism that adjusts electricity tariffs every six months based on fuel prices, electricity generation costs and exchange rates.

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