Power rates up 7.12%
By Karen Arukesamy, The Sun
PUTRAJAYA (May 30, 2011): Households that use 300 kilowatt hour (kWh) or less of electricity a month will not be affected by the higher tariff effective Wednesday, June 1. This means if your monthly bill is RM77 or less, there’s no change.
“The average electricity tariff will be increased by 2.23 sen/kWh or 7.12% from 31.31 sen/kWh to 33.54 sen/kWh,” Energy, Green Techno-logy and Water Minister Datuk Seri Peter Chin Fah Kui told a press conference today.
He said all domestic consumers with a monthly consumption of up to 200kWh (lifeline band) and the next 100kWh will not be affected.
“Domestic consumers in these bands will continue to enjoy the subsidised unit rate of 21.8 sen/kWh and 33.4 sen/kWh respectively.
“Domestic consumers in the 301 to 400 kWh per month band will experience minimal electricity bill increase (0.1%-6% or 7 sen-RM6.60),” he said.
Consumers whose monthly power bill is RM77 and below form 75% of the population. The other 25% will have to pay RM6 more (see table).
The 7.12% increase comprises:
* 5.12% or 1.60sen/kWh due to higher natural gas price to the power sector from RM10.70/mmBTU to RM13.70/mmBTU in line with the increase in global energy prices; and
* 2% or 0.63sen/kWh for Tenaga Nasional Bhd to partly recover the increase of electricity supply cost since the last base tariff revision in June 2006.
“There will an additional 1% imposed on the monthly bill as the Feed-in-Tariff (FiT) to promote renewable energy fund to bear the additional cost. However, domestic consumers who use less than 300kWh/month will be exempted,” he said.
The tariff review package also provides the following special rates and discounts:
* 10% discount on electricity bills enjoyed by local schools and higher learning institutions, places of worship and welfare homes registered with the government; and
* 10% discount extended to partially government-funded educational institutions.
Industrial consumers will experience an average increase of 8.35% (ranging from 6.2% to 10.3%), he said.
Chin said the main rationale for the tariff revision was the higher price of natural gas supplied to the power sector effective Wednesday.
“The increase in natural gas price is unavoidable due to the increase in global energy prices since 2009 and is based on the government natural gas pricing mechanism in which the price is periodically reviewed in tandem with market price trend.
“Since natural gas cost constitutes around 54.2% of the total fuel cost mix (FY2010), the additional fuel cost incurred due to the gas price revision is reflected via the increase in end-use electricity tariff,” he said.
Announcing the increase in the natural gas price earlier at the same press conference, Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop said gas prices were determined based on their alternative fuel pricing.
“For example, if fuel oil is used in power generation and if gas is used to replace fuel oil as an energy source, then the price of gas will be the same as that of fuel oil. The practice of pricing gas relative to its alternative fuels has been adopted in all countries in the region,” he said.
