1. Low Voltage Consumer

Connection charges for Low Voltage consumer consists of:

1. Maximum Demand Charge
2. Additional Cable Charge (if any)
3. Special Request by Customers and/or Third Party Charges (if any)

1. Maximum Demand Charge
• Connection charge depends on Maximum Demand requested by the consumer. The charges are as per Schedule 1.
• This is only applicable for request of supply not more than 6km away from the nearest available supply (that could meet the requested load demand)
• Should the nearest available supply be unable to meet the requested load, the supply may have to be drawn from the nearest substation. In this case, the connection charge still applies as long as the distance does not exceed 6km


2. Additional Cable Charge
• Should the distance exceed 6km, the consumer will only pay for the size of the cable necessary to meet the requested load in excess of 6km based on standard rate of the cable as shown in Schedule 2 even though a larger cable may be laid by TNB to meet the demand of other consumers


3. Special Request by Customers and/or Third Party Charges
• Any request for additional or special request out of normal/standard TNB specification, e.g special request for an additional feeder by consumer or any request from third party such as Local Authority or Government Agencies, the consumer will be required to pay the full cost of the additional request.

2. Medium Voltage Consumer

Connection Charges for Medium Voltage Consumer consist of:

1. Maximum Demand Charge
2. Additional Cable Charge (if any)
3. Special Request by Customers and/or Third Party Charges (if any)
4. Connected Load Charge
5. Liquidated Damages
6. Power Factor Penalty

1. Maximum Demand Charge
• Connection charge per kilowatt Maximum Demand (kW MD) is applicable. The amount to be paid depends on the Maximum Demand requested by the consumer.
• The connection charge is RM 45/kW MD.
• The substation building and the land is to be leased to TNB at a nominal cost of RM10.
• In the event that disagreement arises between the owner and TNB, then the cost of any land will be determined in the manner as stipulated in the provisions under the Electricity Supply Act 1990.
• Applicable only for requests of supply not more than 6km away from the nearest available supply (that is able to meet the requested load demand).
• Should the nearest available supply be unable to meet the requested load, the supply may have to be drawn from the nearest substation. In this case, the connection charge still applies as long as the distance does not exceed 6km.


2. Additional Cable Charge
• Should the distance exceed 6km, the consumer will only pay for the size of the cable necessary to meet the requested load in excess of 6km based on standard rate of the cable as shown in Schedule 2, even if a larger cable is laid by TNB to meet the demands of other consumers


3. Special Request by Customers and/or Third Party Charges
• Any request for additional or special request out of normal/standard TNB specification, e.g special request for an additional feeder by consumer or any request from third party such as Local Authority or Government Agencies, the consumer will be required to pay the full cost of the additional request.


4. Connected Load Charge (CLC)
• Connected Load Charge (CLC) is subjected to consumers who take supply at Medium Voltage and High Voltage. Please find the details of CLC information here.


5. Liquidated Damages
• Liquidated Damages (LD) is applicable for consumers who failed or ceased to take supply for 5 years after supply has been connected. The basis of calculating the quantum of Liquidated Damages is as follows:
  
  
  

        'For each month in the 5 year period, the consumer shall pay 1/120 of the Net Capital Cost of the project.'

  
  

  In general, the LD is calculated according to the formula:

  
  

  1/120 x Net Capital Project Cost x (60-n)

  
  

  = (60 - n) x (P-C)

               120

  
  

  Where : P – Total capital cost of the project

                C – Connection charge paid by the consumer

                (P-C) – Net Capital Cost of the project

                N – number of months that have lapsed after supply is given



6. Power Factor Surcharge
• A Power Factor surcharge is imposed when the customers' Power Factor is less than 0.90 (electricity supply 132kV and above) or less than 0.85 (electricity supply below 132 kV).
• Calculation to determine Power Factor:
  kWh / √ (kWh2 + kVARh2)



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

1. 1.5% surcharge of the current bill – for every 0.01 less than 0.85 Power Factor
   [[(0.85 – PF)/0.01] x 1.5%] x [RM kWh + RM kW + RM ICPT]


2. 3% surcharge of the current bill – for every 0.01 less than 0.75 Power Factor
   [[(0.85 – 0.75)/0.01] x 1.5%] +[[(0.75 – PF)/0.01] x 3% ]] x [RM kWh + RM kW + RM ICPT]



For an example of Power Factor surcharge calculation, please refer here

You may still refer to the previous CC policy here.

3. High Voltage Consumer

Connection Charges for High Voltage Consumer consist of:

1. Connection Charges based on 1st Principle calculation
2. Refundable Connection Charges if Connection Charges under 1st Principle is greater than Project Cost
3. Premium for project implemented under fast track timeline (if any)
4. Project Minimum Monthly Charge (PMMC)
5. Special Request by Customers and/or Third Party Charges (if any)
6. Connected Load Charge
7. Liquidated Damages

1. Connection Charges based on 1st Principle calculation

The basis of the charges is that the consumer has to make up for the shortfall in the return on the capital invested by TNB (herein after defined as “Project Cost”), at internal rate of return (IRR) approved by the Government and secured through the revenue earned from the sales of electricity to the consumer for a 15-year period of supply.

IRR is the Weighted Average Cost of Capital (WACC) approved by the Government under the Incentive-based Regulation (IBR) regime.




The formula for the connection charge is given as below:

Revenue – Running Cost = Annuity Amount

Present Value Future Cash Flow = Annuity Amount times by PVIFA _WACC




where:

PVIFA - Present Value Interest Factor of an Annuity; and

WACC - Weighted Average Cost of Capital




Connection Charges is payable if Present Value Future Cash Flow < Project Cost

If the return falls short of the annual return required (Present Value Future Cash Flow is less than Project Costs), then a connection charge is levied by an amount so that the resultant investment by TNB is reduced to such an extent that the required return is achieved.




Under this principle, the capital invested by TNB of the project attributable to the consumer (Project Cost) is dependent on the nature of the supply based on the following criteria: -

1. If the supply is fully dedicated to the consumer, full project cost will be imposed to determine as the baseline to identify if Present Value Future Cash Flow is greater or less than the project costs; or
2. If the supply is non-dedicated to the consumer or will be part of TNB’s transmission network, Project Cost will be apportion depending to the requested Maximum Demand of the consumer and the carrying capacity of the transmission line.


2. Refundable Connection Charges if Connection Charges under 1st Principle is greater than Project Cost

   Based on principle mentioned under 1st Principle calculation where consumer is not subjected to connection charges if Present Value Future Cash Flow is greater than Project Cost, consumer is subjected to Refundable Connection Charges (RCC) which is equivalent to 25% from the Project Cost.

   
   

   RCC = 25% x Project Cost

   
   

   Consumer is required to achieve 75% from its declared Maximum Demand within:

   1. Six (6) years from when the new supply is commissioned for the new consumer; or
   2. Five (5) years from when the upgraded supply is commissioned for existing consumer who required the additional load with system upgrading
   
   

   If the consumer fails to achieve 75% from its Maximum Demand within time mentioned above, TNB will forfeit or claim the RCC.



3. Premium for project implement under fast track timeline

Consumer may request and TNB may consider, a scheme of supply which is earlier than the date of supply to be made available by TNB in accordance with its current process of providing supply of electricity (herein after defined as “Fast Track Supply”).




For project implemented under Fast Track Supply, the consumer is subjected to premium charges based on the following project timeline:




Level	Project Timeline (Months)	Premium (% from Project Cost)
1	2	3
0-12	13-18	19-24
15	10	5





The premium charge is an upfront payment which is not part of Project Cost for the purpose of calculating connection charges under 1st Principle.



4. Project Minimum Monthly Charge (PMMC)

   PMMC means a fixed monthly charge equivalent to two per cent (2%) of the difference between the Project Cost (as defined below) and the Connection Charge, payable monthly by the Consumer for a maximum period of up to five (5) years from the supply at High Voltage is commissioned.

   PMMC = 2% x (P - C)

   
   

   Where:

   P - Project Cost

   C - Connection charges based on 1st Principle

   (P – C) - Net Capital Cost of the project



5. Special Request by Customers and/or Third Party Charges
• Any request for additional or special request out of normal/standard TNB specification, e.g special request for an additional feeder by consumer or any request from third party such as Local Authority or Government Agencies, the consumer will be required to pay the full cost of the additional request.


6. Connected Load Charge
• Connected Load Charge (CLC) is subjected to consumers who take supply at Medium Voltage and High Voltage. Please find the details of CLC information here.


7. Liquidated Damages
• Liquidated Damages (LD) is applicable for consumers who failed or ceased to take supply for 5 years after supply has been connected. The basis of calculating the quantum of Liquidated Damages is as follows:
  
  

        'For each month of the 5-year period the consumer shall pay 1/120 of the Net Capital Cost of the project.'

  
  

  In general, the LD is calculated according to the formula:

  
  

  1/120 x Net Capital Project Cost x (60-n)

  
  

  = (60 - n) x (P-C)

               120

  
  

  Where : P – Total capital cost of the project

                C – Connection charge paid by the consumer

                (P-C) – Net Capital Cost of the project

                N – number of months that have lapsed after supply is given




For more information on policy prior to these enhanced terms for Connection Charge and Connected Load Charge, kindly refer to Statement of Connection Charges Booklet (1995)