11/8/2017 Charges & Penalties - Tenaga Nasional Berhad

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COMMERCIAL & INDUSTRIAL » CHARGES & PENALTIES

CHARGES & PENALTIES

Familiarize yourself with the various charges and penalties. In this section you can read up on connection
charges, deposit for charges, Connected Load Charges (CLC), and Power Factor Surcharge. There is also
information on electrical welding equipment and the surcharge for temporary electricity supply. Be better
informed so you can avoid unnecessary costs.

Connected Load Charge (CLC)

Power Factor Surcharge
Electrical welding equipment
Temporary supply

Connected Load Charge (CLC)

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Connected Load Charge is a mitigating tools to discourage consumers from over declaring their load
requirement.
READ MORE

CONNECTED LOAD CHARGE (CLC)

Connected Load Charge is a mitigating tool to discourage consumers from over declaring their load
requirement. Over declaration will lead to over plant up and waste of resources and increase in reserve
margin. Without CLC, other consumers have to also pay for the unnecessary higher cost of electricity due
to wastage and this is unfair to those who properly declare.

Other utility who does not have CLC penalty, recover their demand component or fix cost via imposing
contract capacity charge through their tariff rate based on consumer declaration.

Affected customers

All new medium voltage and high voltage consumers (consumers with supply voltage at 6.6kV and above)
are subjected to CLC for a period of 6 years from the date the supply was commissioned with CLC
exemption for the first year only.

or any supply and/or load and/or voltage upgrade, the consumer will be levied new CLC based on the total
maximum demand declared (i.e current maximum demand plus additional maximum demand).

CLC calculation

CLC is applicable when the actual Maximum Demand (MD) recorded on any month is less than 75% of
the declared maximum demand during the said period.

CLC is imposed based on the shortfall between the 75% of the declared maximum demand and maximum
demand recorded in a month. CLC rate charges are RM8.50 per kilowatt and subjected to prevailing
changes from time to time.

Nevertheless, for the first 3 years, the CLC will be based on staggered percentage to assist consumer
during the initial stage of their operation.

The method in determining Reference Maximum Demand* for calculating CLC are as follows:

Year Reference Maximum Demand*

1 0% x 75% x Declared Maximum Demand(CLC exempted for the first year only)
2 50% x 75% x [Declared MD or Highest Recorded MD, whichever is higher]
3 75% x 75% x [Declared MD or Highest Recorded MD, whichever is higher]
4 100% x 75% x [Declared MD or Highest Recorded MD, whichever is higher]
5 100% x 75% x [Declared MD or Highest Recorded MD, whichever is higher
6 100% x 75% x Declared MD or Highest Recorded MD, whichever is higher]

Note: CLC is applicable when MD recorded < Reference MD.

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A penalty of RM8.50/kW will be charged for every kW shortfall between the Actual Maximum Demand
used compared to the Reference Maximum Demand (RMD).
CLC is calculated monthly.
CLC penalty RM8.50 is well below the Maximum Demand rate.
Example of CLC calculation:

Maximum Demand Reference Actual Maximum

Year Declared(assume Maximum Demand(AMD) CLC Penalty(RM)
10,000kW) Demand(RMD) (kW)
0% x 75% x
1 10,000kW 100kW Not Applicable
10,000kW = 0kW
50% x 75% x
2 10,000kW 10,000kW = 5,000kW No penalty. AMD > RMD
3,750kW
75% x 75% x
CLC = RM8.50 x ( 5,625kW
3 10,000kW 10,000kW = 5,000kW
- 5,000kW ) = RM5,312.50
5,625kW
100% x 75% x
4 10,000kW 10,000kW = 7,500kW No penalty. AMD > RMD
7,500kW
100% x 75% x
5 10,000kW 10,000kW = 8,000kW No penalty. AMD > RMD
7,500kW
100% x 75% x
6 10,000kW 10,000kW = 8,000kW No penalty. AMD > RMD
7,500kW

Few activities could be carried out by customers that assist in reducing MD charges such as:

Practicing demand side management such as peak shift i.e. shifting their peak operation/consumption to
off peak period as MD charges is not applicable during off-peak period for customer with peak/off-peak
tariff

Opting for any promotional scheme offered by TNB relating to MD such as Sunday Tariff Rider Scheme
(STR).

Starts your motor/equipment in stages or during off-peak period

Power Factor Surcharge

A Power factor surcharge is imposed when your power factor is less than 0.90 (electricity supply 132kV and
above) or less than 0.85 (electricity supply below 132 kV).
READ MORE

A Power factor surcharge is imposed when your power factor is less than 0.90 (electricity supply 132kV and
above) or less than 0.85 (electricity supply below 132 kV).

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Power factor surcharge for customers with electricity supply below 132 kV is calculated as follows:-

1.5% surcharge of the current bill – for every 0.01 less than 0.85 power factor.

3% surcharge of the current bill – for every 0.01 less than 0.75 power factor.

Example 1:-

Current bill: RM2,000

Power
= 0.80
Factor
Surcharge = [(0.85 – 0.80) / 0.01] x 1.5% x RM2,000 = RM150

Example 2:-

Current bill: RM2,000

Power
= 0.75
Factor
Surcharge = [(0.85 – 0.75) / 0.01] x 1.5% x RM2,000 = RM300

Example 3:-

Current bill: RM2,000

Power
= 0.60
Factor
Surcharge = [((0.85 – 0.75) / 0.01) x 1.5% x RM2,000] + [((0.75 –
0.60) / 0.01) x 3% x RM2,000] = RM1200

What is Power Factor

Power Factor is an index used to compute the efficiency level of electricity usage. The index is measured from 0
to 1. A higher index shows efficient usage of electricity and vice versa. Low power factor shortens the lifespan
of electrical appliances and causes power system losses to TNB. To understand power factor, we will start with
the definition of some basic terms:-

KW Working Power (also called Actual Power, Active

Power or Real Power). It is the power that powers
equipment and performs useful work.
KVAR Reactive Power. It is the power which magnetic
equipment such as transformers, motors and relays
need to produce the magnetizing flux.
KVA Apparent Power. It is the vectorial summation of
KVAR and KW.

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Let’s look at a simple analogy in order to better understand these terms. Let’s say you are at a park and it is a hot
day. You order a glass of a carbonated drink. The thirst-quenching portion of the drink is represented by KW.
Unfortunately, along with your drink comes a little bit of foam. The foam does not quench your thirst. This foam
is represented by KVAR. The total content of your glass, KVA, is this summation of KW (the carbonated drink)
and KVAR (the foam).

Power Factor is the ratio of Working Power to Apparent

Power. Power Factor = KW / KVA

Looking at our carbonated drink analogy, power factor is the ratio of carbonated drink (KW) to the carbonated
drink plus foam (KVA). Power Factor = KW / (KW + KVAR) = Carbonated drink / (Carbonated drink + foam)

Thus, for a given KVA:- i. The more foam you have, the
lower your power factor. ii. The less foam you have, the
higher your power factor.

For efficient usage of electricity, power factor must approach 1.0. A Power factor that is less than 0.85 shows
inefficient use of electricity.

Calculation for KWh _

Power Factor = √(KWh2 +
KVARh2)

Causes of Low Power Factor

In our carbonated drink analogy, low power factor resulted when the amount foam is was large. Low power
factor is caused by inductive loads, which are sources of reactive power. Examples of inductive loads are:-

Transformers

Induction motors

High Intensity Discharge (HID) lighting

Inductive loads constitute a major portion of power consumed by commercial and industrial sectors.

How to Improve Your Power Factor

Customers are advised to follow these steps:-

Install capacitors (KVAR Generators)

Capacitor

Corrector

Synchronous generators

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Synchronous motors

Minimise operations of idling or lightly loaded motors.

Avoid operating equipment above its rated voltage.

Replace standard motors as they burn out with energy efficient motors.

Benefits of Improving Power Factor

Benefit 1: Reducing KW billing demand

Low Power Factor requires high reactive power (KVAR) and apparent power (KVA), which is the power that
TNB supplies. Therefore, a facility’s low power factor forces TNB to increase its generation and transmission
capacity in order to handle this extra demand. By increasing the power factor, customers use less KVAR. This
results in less KW, which equates to RM savings for TNB.

Benefit 2: Eliminating power factor surcharge

Utility companies all around the world charge customers an additional surcharge when their power factor is less
than 0.95. In fact, some utilities are not obliged to deliver electricity to their customers at any time the
customer’s power factor falls below 0.85. Thus, customer can avoid this additional surcharge by increasing
power factor. In Malaysia, TNB is allowed through the Malaysian Grid Code and the Malaysian Electricity
Distribution Code, to impose a surcharge to the customer if the power factor is <0.85 for customers receiving
less than 132kV.

Benefit 3: Increased system capacity and reduced system losses in your electrical system

Low power factor causes power system losses in the customer’s electrical system. By improving power factor,
these losses can be reduced. With the current rise in the cost of energy, increased facility efficiency is important.
Moreover, with lower system losses, customers are able to add additional load in their electrical system.

Benefit 4: Increased voltage level in your electrical system, resulting in more efficient motors

As power losses increase, customer may experience a voltage drop. Excessive voltage drops can cause
overheating and premature failure of motors and other inductive equipment. Therefore, by raising the power
factor, customers can minimise these voltage drops along feeder cables and avoid related problems. Motors will
run more efficiently, with a slight increase in capacity and starting torque.

Electrical welding equipment

A Power electrical welding equipment surcharge is imposed for commercial and industrial with transformer-
operated electric welding equipment installed commercial and industrial.
READ MORE

Electrical welding equipment

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In addition to the appropriate tariff rate, there will be a surcharge for transformer-operated electric welding
equipment installed for low voltage consumers at RM3.00 per kVA per month, and for medium and high voltage
consumers at RM2.00 per kVA per month. Motor-operated welding sets are exempted from the foregoing
surcharge.

Temporary supply
A consumer who applies for temporary supply shall be charged at the tariff rate appropriate to their category
plus 33% surcharge on the total monthly bill.
READ MORE

Temporary supply

The supply agreement for the temporary load shall be time restricted and the consumer shall be subjected to a
Connection Charge of 100% of the total cost of installing and subsequent dismantling of TNB’s infrastructure to
provide this temporary supply.

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