THE Federation of Malaysian Manufacturers (FMM) has cried foul over the recent electricity tariff surcharge, saying it came at such short notice that industry players had insufficient time to adjust to the additional cost.

FMM president Soh Thian Lai said business owners, especially exporters, whose contract terms had been agreed on earlier, must brace themselves for higher-than-usual electricity bills, following the implementation of the imbalance cost pass-through (ICPT) mechanism.

“The ICPT should have been moderated to take into consideration the recent natural gas price increase by removing the rebate without imposing any surcharge,” he told Bernama.

“The increase in electricity cost for the manufacturing sector is estimated to exceed 6%, in view of the rebate enjoyed in the previous six months.”

On Friday, Tenaga Nasional Bhd (TNB) announced that beginning July 1, commercial customers and businesses will have to pay a surcharge of 1.35 sen/kWh, due to higher fuel and generation costs.

It said the average base tariff remains unchanged at 39.45 sen/kWh.

However, due to higher fuel and generation costs between January and June 30, the additional cost of RM698.19 million, or 1.35 sen/kWh ICPT surcharge, will be passed through via the ICPT mechanism.

Household customers with a monthly consumption not exceeding 300/kWh will not be affected.

The ICPT mechanism enables TNB to pass on changes in fuel and generation costs to consumers’ electricity tariff every six months.

On its absolute impact, Soh said it would vary according to the tariff category and electricity consumption of each company.

He urged the government to maintain the tariff for now, due to the burden of various regulatory costs. – Bernama, July 2, 2018.