Electricity Tariffs Set To Increase by 14% in Peninsular Malaysia from July 2025
Source: SAYS
Peninsular Malaysia will experience a significant rise in electricity tariffs starting in July 2025, with a 14.2% increase in base rates. The new base rate will increase from 39.95 sen/kWh to 45.62 sen/kWh, according to Tenaga Nasional Berhad (TNB).
The increase follows the end of the current Regulatory Period 3 (RP3), which has been in effect since 2014. While the new regulatory period, RP4 (2025-2027), will come into effect next year, customers will have six months with unchanged tariffs to adjust to the new base rates.
During this adjustment period, any discrepancies will be covered by Kumpulan Wang Industri Elektrik (KWIE), as stated in TNB’s filing with Bursa Malaysia.
TNB clarified that the regulatory rate of return would remain at 7.3%. This will ensure continued investment in the electricity supply, keeping it reliable and meeting the growing demand.
The largest portion of electricity tariffs will continue to stem from generation costs, particularly from gas and coal. Additionally, fluctuations in fuel prices will be managed via the Imbalance Cost Pass-Through (ICPT) mechanism.The government recently approved the implementation of RP4 under the Incentive-Based Regulation (IBR) framework, allowing for a substantial RM42.821 billion in capital expenditure (CAPEX) and RM20.782 billion in operating expenditure (OPEX). The investments are intended to prepare the country’s energy infrastructure for the future and support essential operational activities for TNB’s electrical systems.
