ICPT by TNB Malaysia 2023: How to Calculate Your New Electricity Bill?

What is ICPT?

ICPT stands for Imbalance Cost Pass-Through. It is a mechanism that allows Tenaga Nasional Berhad (TNB) to reflect changes in the cost of fuel and other generation-related costs in the electricity tariff every six (6) months. The ICPT rate is calculated based on the actual fuel costs and generation-related costs for the previous six-month period, minus the corresponding baseline costs in the Base Tariff.

The purpose of ICPT

The purpose of ICPT is to ensure that electricity consumers pay a fair price for their electricity, reflecting the actual costs of generation. ICPT also helps to protect consumers from sudden changes in electricity prices due to fluctuations in fuel prices. For example, there’s a capping mechanism for residential users below RM700, such as with a subsidy of 2 sens.

History of ICPT in Malaysia

ICPT was first introduced in Malaysia in 2014. Since then, it has been implemented every six months, in January and July. The ICPT rate has varied over the years, depending on the fuel prices.

Importance of ICPT for Electricity Consumers

ICPT is important for electricity consumers because it helps to keep electricity prices stable. This is especially important for low-income households, who may be more vulnerable to changes in electricity prices. ICPT also helps to promote energy efficiency, as consumers are incentivized to conserve energy in order to reduce their electricity bills.

TNB's Role in ICPT

Tenaga Nasional Berhad (TNB) is the sole electricity utility company in Peninsular Malaysia. It is responsible for generating, transmitting, and distributing electricity to all consumers in the region.

TNB's role in ICPT is to:

• Calculate the ICPT rate based on the actual fuel costs and generation-related costs for the previous six-month period.
• Publish the ICPT rate on its website at least 30 days before the implementation date.
• Implement the ICPT rate on the scheduled date.

TNB is committed to transparency in ICPT calculations. It publishes all the relevant information on its website, including the actual fuel costs, generation-related costs, and the ICPT rate. This allows consumers to understand how the ICPT rate is calculated and how it affects their electricity bills.

In addition to publishing the ICPT rate, TNB also provides regular updates on the fuel prices and the ICPT calculation methodology. This helps consumers to stay informed about the factors that affect their electricity bills.

Here are some additional things to keep in mind about TNB's role in ICPT:

• TNB is not responsible for setting the base tariff. The base tariff is set by the Energy Commission, an independent regulatory body.
• TNB is not responsible for the taxes and surcharges that are applied to electricity bills. These taxes and surcharges are set by the government.

How ICPT Affects Your Electricity Bill

The ICPT rate is applied to all electricity consumers in Peninsular Malaysia, regardless of their tariff category. The ICPT rate is not the only factor that affects the electricity bill. Other factors include the base tariff, the number of units of electricity consumed, and the taxes and surcharges.

The ICPT rate can have a significant impact on your monthly electricity bill. If the ICPT rate is positive, it means that you will have to pay more for your electricity. If the ICPT rate is negative, it means that you will get a rebate.

The factors that influence ICPT rates include the following:

• The price of fuel: The ICPT rate is directly affected by the price of fuel, such as coal, natural gas, and oil. When the price of fuel goes up, the ICPT rate also goes up.
• The exchange rate: The ICPT rate is also affected by the exchange rate between the Malaysian Ringgit and the US Dollar. When the Ringgit weakens against the US Dollar, the ICPT rate also goes up.
• The weather: The ICPT rate can also be affected by the weather. When there is a lot of rain, the ICPT rate may go down because TNB can generate more electricity from hydroelectric power.

The ICPT Calculation Process

Generally, this is the only formula you need to calculate your ICPT rate.

ICPT Amount (RM) = Number of unit Consumed (kWh) x ICPT Rate (RM/kWh)

In real life, consumers do not need to manually calculate their ICPT amount, as it is well-presented in the electricity bill. You may refer to the sample below.

Image source: TNB

Here is a detailed breakdown of how to calculate ICPT:

1. Gather the necessary information. This includes the following:

• The ICPT rate for the current six-month period. You can find this information on the TNB website.
• Your electricity consumption for the previous six-month period. You can find this information on your electricity bill.
• The base tariff for your tariff category. You can find this information on the TNB website.

2. Understand the tariff rates. The base tariff is the fixed cost of electricity that you pay, regardless of your consumption. The ICPT rate is a variable cost that is added to the base tariff. The amount of the ICPT rate depends on your consumption level.

3. Apply the ICPT formula. The ICPT formula is as follows:

ICPT = (Actual fuel costs and generation-related costs - Baseline costs) / Number of kWh consumed

• The actual fuel costs and generation-related costs are the costs that TNB incurred to generate electricity during the previous six-month period.
• The baseline costs are the costs that TNB would have incurred to generate electricity if the fuel prices had remained the same as the previous six-month period.
• The number of kWh consumed is the total amount of electricity that you consumed during the previous six-month period.

4. Calculate the % of ICPT cost on electricity bill. The % of ICPT cost on electricity bills is calculated by dividing the ICPT amount by the total electricity bill amount.

% of ICPT cost on electricity bill = ICPT amount / Total electricity bill amount

5. Do the comparisons before and after the ICPT revision. The ICPT rate is revised every six months, in January and July. You can compare the ICPT rate for the current six-month period to the ICPT rate for the previous six-month period to see if there has been any change.

Recent Changes in ICPT (2023)

The latest ICPT updates for Peninsular Malaysia are as follows:

• Domestic consumers

• Non-domestic consumers

These changes will take effect from 1 July 2023 to 31 December 2023, may refer more on the official TNB website.

Here’s a quick glance at the average ICPT rate across the years, from 2014 to 2023:

Government Regulations on ICPT

The government of Malaysia has implemented a number of policies related to ICPT. These policies are designed to ensure that ICPT is fair and transparent and that it does not have a disproportionate impact on consumers.

One of the key policies is the establishment of the Energy Commission (EC). The EC is an independent regulatory body that is responsible for monitoring ICPT and ensuring that it is implemented in accordance with the law. The EC also has the power to intervene if it believes that ICPT is not being implemented fairly or transparently.

Another key policy is the requirement for TNB to publish the ICPT rate at least 30 days before it is implemented. This gives consumers time to prepare for any changes to their electricity bills.

The government also provides subsidies to help protect consumers from the impact of higher electricity prices. These subsidies are typically targeted at low-income households and businesses.

Overall, the government of Malaysia has taken a proactive approach to regulating ICPT. This has helped to ensure that ICPT is fair and transparent and that it does not have a disproportionate impact on consumers.

Conclusion

In conclusion, ICPT is a mechanism that allows TNB to reflect changes in the cost of fuel and other generation-related costs in the electricity tariff every six (6) months. The ICPT rate is applied to all electricity consumers in Peninsular Malaysia, regardless of their tariff category. The ICPT rate is only one factor that affects the electricity bill. Other factors include the base tariff, the number of units of electricity consumed, and the taxes and surcharges.

It is important to stay informed about ICPT for financial planning. The ICPT rate can have a significant impact on your monthly electricity bill. If you are concerned about the impact of ICPT on your electricity bill, you can take steps to reduce your electricity consumption.

As of now, ICPT is being used as a tool to rationalize subsidies. For high electricity consumers, they will be subjected closer to the real cost, as the higher the electricity consumption, the higher the ICPT amount to be paid. Conversely, low electricity consumers, especially B40 citizens, can be granted more subsidies to reduce their burdens.

All in all, by understanding ICPT, you can make informed decisions about your electricity consumption and financial planning.

Frequently Asked Questions (FAQs)

A. Is ICPT the same as electricity tariffs?

No. It is an additional mechanism to hand down subsidies (in case of low electricity users) or surcharges.

B. How often does TNB update ICPT rates?

TNB updates the ICPT rates every six (6) months, in January and July. This is done to reflect the actual costs of generating electricity.

C. Can I reduce my ICPT charges?

Ensure usage falls below 1500 kWh: As mentioned earlier, domestic consumers with a monthly electricity consumption of 1500 kWh or below will not be affected by the ICPT revision.

Utilize solar panels: Solar panels can help you to reduce your electricity consumption and save money on your electricity bills. Solar panels generate electricity from sunlight, which means that you can use solar energy to power your home and reduce your reliance on grid electricity. This can help you to reduce your ICPT charges, as the ICPT rate only applies to grid electricity. Check out our solar panels here

D. Are there any subsidies for ICPT?

The government provides subsidies to low-income households and businesses to help reduce the impact of higher electricity prices. These subsidies are typically targeted at consumers who are most likely to be affected by the ICPT revisions. Consumers can apply for subsidies through the government's social welfare program.