Peninsular Malaysia will experience a 14.2% rise in base electricity tariffs from July 2025, with rates increasing from 39.95 sen/kWh to 45.62 sen/kWh. This change follows the current electricity tariff schedule, Regulatory Period 3 (RP3) 2022-2024, which has been in place since 2014, as reported by FMT.
Although the new tariff structure, Regulatory Period 4 (RP4) 2025-2027, will come into effect next year, the first six months of tariff increases will remain at the current level to allow customers time to adjust to the new base rates.
Photo via The Malaysian Reserve
During this transitional period, any discrepancies in tariff calculations will be addressed by the Kumpulan Wang Industri Elektrik (KWIE), Tenaga Nasional Berhad (TNB) confirmed in a filing to Bursa Malaysia.
TNB also highlighted that the regulatory rate of return would remain at 7.3%, ensuring the company can make the necessary investments to maintain a reliable electricity supply that meets the growing demand.
Generation costs, primarily driven by gas and coal, will continue to be the largest component of the electricity tariff. Any additional costs resulting from higher fuel prices will be managed through the Imbalance Cost Pass-Through (ICPT) mechanism.
The Malaysian government has recently approved the implementation of RP4 under the Incentive Based Regulation (IBR) framework. The Energy Commission (EC) communicated this decision to TNB on Monday, 24 December, as reported by the New Straits Times.
Photo via Free Malaysia Today
According to TNB, the new regulatory period will enable a capital expenditure (CAPEX) investment of RM42.821 billion and operating expenditure (OPEX) of RM20.782 billion. TNB further noted that the CAPEX would significantly contribute to the nation's economy and help prepare the electricity grid for the energy transition, while the OPEX would support ongoing operational and maintenance needs for TNB's infrastructure.
