Monday, July 8, 2013

Move to cushion fuel price hike

Tenaga Nasional Berhad’s Tuanku Jaafar power station in Port Dickson. The Energy Commission is considering implementing the Fuel Cost Pass-Through mechanism next year.

THE Energy Commission is studying ways to cushion the impact of future tariff hikes on consumers by implementing the Fuel Cost Pass-Through (FCPT) mechanism next year.

Deputy Energy, Green Technology and Water Minister Datuk Seri Mahdzir Khalid told the Dewan Rakyat yesterday that FCPT was a mechanism under incentive-based regulations to encourage more efficient utility operations through a reward-and-penalty system.

"Once implemented, consumers will be subject to fuel market prices. The fluctuations in fuel prices will be reflected in the tariff prices billed to consumers.

"And if the prices drop, consumers will enjoy lower fuel market price.

"It is our hope that the FCPT, once implemented, will help cushion the tariff changes for consumption of 200kWh and above.

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"The FCPT implementation will also take into account the country's economic performance as well as Tenaga Nasional Berhad's (TNB) performance.

"At the same time, it will protect the people from being burdened by future tariff hikes."

Mahdzir was replying to a question by Liang Teck Meng (BN-Simpang Renggam) on when the FCPT mechanism would be implemented by TNB in an effort to reflect the actual fuel cost.

Since 1997, domestic consumers with electricity consumption of less than 200kW a month have benefited from a lower tariff of 21.8 sen per kW per hour. In addition, bills amounting to RM20 or less per month will be waived.

Currently, TNB and Sarawak Electricity Sdn Bhd are two utility companies that power Peninsular Malaysia, Sabah and Sarawak.

For the record, the last TNB tariff hike was in May 30, 2011.

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