Optimizing Electricity Tariff Using ILOG: Case of Utility Consumers in Peninsular of Malaysia

• Published in: Global business and management research 2018-07, Vol.10 (3), p.345
• Main Authors: Saad, Noriza Mohd, Abdullah, Zulkifli, Husin, Norhayati Mat, Yusof, Nora Yusma Mohamed, Ibrahim, Joon, Mohayiddin, Ahmad Lutfi, Arshad, Mohamad Taufik Mohd
• Format: Article
• Language: English
• Subjects: Competition; Consumers; Consumption; Costs; Customers; Efficiency; Electric rates; Electricity; Electricity distribution; Energy; Energy economics; Energy policy; Lighting; Optimization; Prices; Reforms; Tariffs; Transition economies
• ISSN: 1947-5667

Purpose: To identify the optimized average electricity tariff by type of consumers in Peninsular of Malaysia. Design/methodology/approach: ILOG optimization approach. Findings: ILOG produces an optimized, efficient and fair electricity tariff for different catgories of consumers' namely domestic, commercial, industrial, specific agriculture as well as public lighting that can compare with the current practice. Research limitations/implications: As the industry is highly regulated, the actual data is highly sensitive, confidential and not publicly available. Therefore, this study uses an imitation data to represent the sales, number of customers, maximum demand and others. Practical implications: The project assists Tenaga Nasional Berhad (TNB) in applying optimization method in revising the upcoming electricity tariff. Originality/value: The study enables the development of a simulator using optimization model for electricity tariff revision in Peninsular of Malaysia, which is supported by the ILOG Optimization System.