KUALA LUMPUR: Tenaga Nasional Bhd (TNB) expects the continued implementation of the Imbalance Cost Pass-Through (ICPT) mechanism to have a neutral impact on the company.
ICPT allows TNB to reflect changes in fuel and other generation-related costs in the electricity tariff.
It also allows the government to review the tariff every six months.
On June 29, Energy Transition and Water Transformation Ministry (Petra) announced that ICPT implementation would be continued for the period of July to December 2024.
The ministry also announced that commercial and industrial users will get a reduction in the ICPT rate of one sen/kWh until the end of the period.
It also announced a lower surcharge, by one sen/kWh, for street lighting category (tariff G and G1) under the supervision of the local authorities (PBT) for the same period so that the PBT can provide comprehensive lighting services in public areas.
In a filing with Bursa Malaysia, TNB said that the implementation of ICPT will not have any effect on its business operations and financial position.
To-date, TNB said the government has successfully implemented 20 cycles of ICPT since the introduction of the mechanism in 2015.
"The decision was made to address the additional generation costs due to the higher fuel prices used for the supply of electricity during the period of January 1 to June 30, 2024," it said.
Petra said the amount of targeted electricity subsidies for the period from July to December 2024 will be as much as RM2.192 billion.
TNB's share price last traded unchanged at RM13.78 a share, giving it a market capitalisation of RM79.75 billion.