Consumers will pay more for electricity if there is an increase in fuel costs once Tenaga Nasional Berhad (TNB) implements the Fuel Cost Past Through (FCPT) mechanism next year.
However, Deputy Energy, Green Technology and Water Minister Datuk Seri Mahdzir Khalid said any increase under the mechanism, which would see tariffs being determined by fuel costs, would be minimal and could even be staggered over an extended period of time.
The Energy Commission, he said, was also studying several proposals to minimise the effects of the mechanism on electricity tariff for households, including maintaining incentives for thrifty consumers.
“No decision has been made with regards to the effect of the FCPT on electricity tariff. The Commission is studying the matter to look at several ways on how to minimise the effect on domestic tariff,” he told reporters at the Parliament lobby here yesterday.
Under the mechanism, additional fuel costs due to the increase in fuel prices will be reflected in a higher electricity tariff while similarly, any reduction or savings will be returned to consumers by lowering the tariff.
The mechanism, which had been proposed from as far back as 2005, had already been adopted by utility companies in many countries such as Singapore, Thailand, the Philippines and Japan.
The matter, added Mahdzir, would still have to go through several approval stages, including getting the Prime Minister’s nod.
“Several incentives will be maintained to benefit specific groups of consumers such as those who use less than 200kW of power a month or whose monthly bill does not exceed RM20,” he said.
Households which used less than 200kW of power a month would be charged 21.8sen per kW, an incentive in place since 1997, he pointed out, while those with monthly bills of RM20 or less would continue to enjoy free electricity.
Earlier, Mahdzir told Liang Teck Meng (BN-Simpang Renggam) that the move to introduce the FCPT was aimed at determining the electricity tariff in a more efficient manner for consumers.
“Under this mechanism, any change in the fuel costs will be channelled to the consumers based on the determination of the tariff set by the government,” he said.
Liang had wanted to know when the FCPT mechanism would be implemented by TNB to reflect the actual cost of fuel.