PETALING JAYA: Starting next July, the base electricity tariff in Peninsular Malaysia will be raised by 14.2% to 45.62 sen per kilowatt-hour (kWh), along with a new tariff schedule.
The change will take place under the three-year Regulatory Period 4 (RP4) that will be effective from Jan 2025 to Dec 2027. Under the RP3 2022-2024, base tariff was set at 39.95 sen/kWh.
However, for the first six months of RP4 until June 30, 2025, there will be no change in the electricity tariff rate and tariff structure.
This means consumers are given six months to adjust to the new base tariff.
“Any differences from January to June 2025 (between the new and old base tariff rates) will be funded through Kumpulan Wang Industri Elektrik,” Tenaga Nasional Bhd
(TNB) told the bourse yesterday.
The current electricity tariff schedule has been in place since 2014.
“The government’s decision to implement RP4 is a testament of the government’s commitment to the Incentive Based Regulation (IBR) framework, which has been the pillar of sustainability and stability of the electricity supply industry.
“It provides a transparent regulatory framework, advocates cost efficiencies and ensures financial and operational sustainability of the system and the industry.
“Through RP4 implementation under IBR, TNB commits to ensure a reliable and continuous supply of electricity to our customers, enhance customer service level and facilitate the nation's energy transition agenda.
“In addition, TNB remains dedicated in supporting the nation through corporate social responsibility initiatives while ensuring a sustainable and resilient electricity system.”
Under RP4, the allowed capital expenditure (capex) is RM42.821bil, which consists of RM26.554bil base capex and RM16.267bil contingent capex.
The total allowed capex for RP4, according to TNB, is set to bring significant economic benefits towards stimulating the nation’s economy and preparing the electricity network to facilitate the nation's energy transition agenda.
The allowed operating expenditure (opex) is RM20.782bil, which supports the planning and execution of necessary operational and maintenance activities for all of TNB’s electrical infrastructures.
“The regulatory rate of return has been maintained at 7.3% as per RP3.
“This will enable TNB to make essential investments in the industry, ensuring a continuous and reliable electricity supply to meet the growing demand of customers.”
Generation costs remain the largest component of the electricity tariff, with gas and coal continuing to be the primary fuel sources for electricity generation during this period.
Any additional generation costs resulting from higher fuel prices for electricity supply will be passed through via the Imbalance Cost Pass-Through mechanism.
“TNB remains neutral in this regard and there will be no impact to the company's business operations or financial position,” said the utility giant.
