Electricity base tariff going up by 14% not true, but expect a raise in H2 2025, rate to be determined – PM

Last month, it was reported that the base electricity tariff in Peninsular Malaysia will be raised from the current 39.95 sen/kWh to 45.62 sen/kWh in July 2025, along with a new tariff schedule in July 2025. Now, prime minister Datuk Seri Anwar Ibrahim has come out to say that it’s not true.

However, the PM says that electricity tariffs is expected to be raised by the second half of the year, with the rate to be determined after a revision, which will be based on capacity and price for a set period. Basically, it will go up, but perhaps not exactly at 14%.

“About the Imbalance Cost Pass-Through (ICPT), it won’t be 14%, no! The revision every six months is based on the current rate. So I don’t think that it will be something that overburdens the community,” Anwar said at the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) CNY event in KL yesterday, reported by Astro Awani.

“But it sure is not what is being said. That’s why I just checked with Zafrul (MITI minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz) to see if I got it wrong,” he added.

It was reported that the base electricity tariff will be raised from 39.95 sen/kWh to 45.62 sen/kWh (+14.2%) come July 2025, along with a new tariff schedule.

The change is part of the three-year Regulatory Period 4 (RP4) that will be effective from January 2025 to December 2027, replacing RP3 2022-2024. However, from January to end-June 2025, there will be no change in the electricity tariff rate and tariff structure, giving the public half a year to adjust. The current tariff schedule has been in place since 2014.

Tenaga Nasional Berhad (TNB) told Bursa Malaysia that the RP4 implementation shows the government’s commitment to the Incentive Based Regulation (IBR) framework. “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,” it said.

Generation costs remain the largest component of the electricity tariff, with gas and coal still the primary fuel sources during this period. Any additional generation costs resulting from higher fuel prices for electricity supply will be passed through via the ICPT mechanism.

So, it’s not a matter of will it go up, but by how much. This will be of interest to EV owners who have ‘transferred’ their fuel costs to their TNB bill. The current highest tariff is 57.1 sen per kWh. We’ll see.

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