electricity

THE Federation of Malaysian Manufacturers (FMM) has welcomed the government’s recent electricity tariff restructuring under Regulatory Period 4 (RP4), which it says introduces greater transparency and encourages better demand-side management.

However, it has urged a review of the high voltage (HV) time-of-use (TOU) tariff structure to ensure Malaysia remains competitive regionally.

In a statement, FMM noted that the RP4 rebasing exercise, which reflects current fuel costs, results in an overall tariff reduction of 19%, with 70% of medium voltage customers expected to see lower bills based on current usage patterns.

The government’s RM5 billion allocation to absorb fuel cost adjustments in the first half of 2025 was also acknowledged.

FMM particularly lauded the move to extend off-peak hours by 80%, from 70 to 128 hours weekly, including weekends.

“FMM greatly welcomes the increase in the off-peak hours… which FMM has been advocating for the past decades,” it said.

The introduction of the Automated Fuel Adjustment (AFA), replacing the previous Imbalance Cost Pass-Through (ICPT) mechanism, was also seen as a positive step toward better reflecting real market energy prices.

However, FMM raised concerns over the revised HV TOU structure, noting that under the new model, the higher the voltage, the higher the cost – a departure from regional practices where high-voltage users typically benefit from lower per-kWh rates and a wider spread between peak and off-peak charges.

The gap between peak and off-peak rates has narrowed from 40% previously to below 10% under the new structure.

“In this regard, FMM calls for a review on the tariff structure for HV TOU category to ensure that the tariff remains competitive and attractive in the long term for the high voltage users,” said FMM president Tan Sri Datuk Soh Thian Lai.

FMM also called for further announcements on renewable energy schemes, including enhancements to the Green Electricity Tariff, to support industrial decarbonisation.

It further urged the government to explore additional support measures, such as targeted incentives for strategic industries like iron and steel. — TMR

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The post FMM welcomes electricity tariff restructuring but calls for review of high-voltage rates appeared first on The Malaysian Reserve.

EC is committed to ensuring the implementation of tariffs based on fair, transparent
and sustainable principles

Through this incentive, domestic consumers with electricity consumption of 1,000kWh and below are expected to be unaffected

MORE than 23.6 million domestic consumers in the Peninsula will enjoy fairer and more progressive electricity rates through the implementation of the new electricity tariff schedule.

This tariff will be effective from July 1, 2025, to Dec 31, 2027, under the Incentive-based Regulation (IBR) framework, in line with the provisions of Section 26 of the Electricity Supply Act 1990.

The electricity tariff changes for the Regulatory Period 4 (RP4) involve the restructuring of three components, namely the average base tariff rate; the new tariff schedule; and the fuel cost adjustment mechanism.

Adjustment of Average Basic Tariff Rates

The average basic tariff rate is adjusted based on the estimated cost of electricity supply for the RP4 period and is set at 45.40 sen/kilowatt-hour (kWh) compared to 45.62 sen/kWh approved in December 2024. With this adjustment, the average overall cost of electricity tariffs is reduced by up to 19% compared to the Third Regulatory Period (RP3).

Changes to Electricity Tariff Structure Include Consumer Categories, Charges and Incentives

The introduction of this new tariff schedule includes the following:x

(i) changes to consumer categories which are divided into domestic and non-domestic based on voltage usage, whether low, medium or high voltage; and

(ii) the setting of each charge for energy, capacity, network and retail components based on related costs.

The Energy Efficiency Incentive will be introduced to 23.6 million domestic consumers who practise prudent electricity use. Through this incentive, domestic consumers with electricity consumption of 1,000kWh and below are expected to be unaffected by the implementation of the new tariff schedule.

Low voltage non-domestic consumers using 200kWh and below will also benefit from this incentive. In addition, the Time of Use (TOU) scheme has been streamlined and extended to longer off-peak periods, namely the entire Saturday and Sunday, and 10pm to 2pm from Monday to Friday.

This is to encourage more efficient management of consumption according to demand times, in line with efforts towards a more efficient and sustainable energy system. If users use off-peak hours, they can save on electricity bills compared to peak usage.

To ensure social and welfare aspects, the government has agreed that:

(i) specific tariffs will be used for the agriculture, water and sewerage services and rail or traction operators categories;

(ii) a 10% rebate will be provided to registered institutes of higher learning, schools, welfare homes and houses of worship; and

(iii) the continuation of the RM40 Electricity Bill Rebate Programme, a monthly assistance of up to a maximum of RM40 given to Heads of Households (KIRs) with hardcore poor status and registered in the e-Kasih system under the Prime Minister’s Department (JPM). Users can check their eligibility status on https://semakanrebat.petra.gov.my/apps/public/index.php or visit the nearest electrical utility store.

Overall, this approach aims to promote energy efficiency initiatives and the use of renewable energy (RE) that provide mutual benefits through a more efficient and sustainable energy system.

For this purpose, all consumers will receive electricity bills in a new, more detailed format (itemised billing).

Following the implementation of this new tariff schedule, the majority of consumers are expected to be unaffected. In fact, consumers who use energy efficiently will enjoy higher savings through the Energy Efficiency Incentive.

Reform of Cost Adjustment Mechanism

For the energy charge component, a new and more dynamic fuel cost adjustment mechanism, namely the Automatic Fuel Adjustment (AFA), will replace the Imbalance Cost Pass-through (ICPT) mechanism.

This mechanism allows for automatic generation cost adjustments based on current market fuel prices and foreign exchange rates. The information will be reported monthly on the Energy Commission (EC) website.

Implementation and Support Services for Consumers

The new tariff schedule will be effective from July 1, 2025, and will be adjusted in electricity bills starting from July 2025. Details of the new rates and categories (if applicable) can be checked through the following channels:

– The tariff schedule will be displayed on https://www.mytnb.com.my/tariff starting from June 21, 2025, at 12pm;

– Estimate the cost of the monthly electricity bill in the future using the electricity tariff calculator which can be accessed as early as Monday, June 23, 2025, via https://www.mytnb.com.my/tariff.

Energy Commission’s Commitment

As the energy regulatory body in Peninsular Malaysia, EC is committed to ensuring the implementation of tariffs based on fair, transparent and sustainable principles to meet the needs and balance the interests of all energy consumers. This comprehensive structuring and coordination is an important step in realising and strengthening the country’s equitable and inclusive energy transition agenda.