Big changes to domestic TNB bill structure – no more tiered rates, base tariff up by 13.64% from July 1, 2025

The way residential users will be charged for electricity in Malaysia is set to undergo a major change, with the energy commission (Suruhanjaya Tenaga, or ST) having announced earlier today that the average base electricity tariff in Peninsular Malaysia will be increased from the current 39.95 sen/kWh to 45.4 sen/kWh from July 1, 2025.

The announced rate is a fraction lower than the 45.62 sen/kWh that was approved in December 2024, and in terms of percentage, represents a 13.64% increase instead of the +14.2% that would have resulted from the previously approved rate.

The biggest change that domestic users will experience is your TNB bill with no longer be based on a tiered kWh rate, as you can see from the comparison above. The next big change is rates are going to be revised on a monthly basis based on the cost of fuel used for electricity generation, which we will explain below.

The actual new tariff rates haven’t been published, but will be announced tomorrow at 12 pm on the TNB website. While your bills will now be presented differently, the more important question is whether you will be paying more for your electricity consumption. By all accounts, the increase means you will, but there’s a silver lining for the majority of users, as explained further below.

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

The ST said that the tariff revision involves a restructuring of the average base tariff rate, a new tariff schedule, and a revamped automatic fuel cost adjustment (AFA) mechanism, the latter replacing the the current Imbalance Cost Pass-Through (ICPT) system.

Under the new AFA, adjustments will be made based on monthly fuel prices and exchange rates, allowing for either a rebate or surcharge to be made depending on actual and benchmarked fuel prices. This means that the electricity tariff will be adjusted on a monthly basis instead of every six months, which would mean you could be paying more or less for your monthly bill even if you consume exactly the same amount of electricity every month.

Despite all the changes, the commission said that under the new tariff structure, more than 23.6 million domestic electricity users in the peninsular are set to benefit from fairer and more progressive rates.

The new tariff schedule will see users now being divided into domestic and non-domestic categories, based on voltage usage (low, medium or high), while charges will reflect actual costs across energy, capacity and network components.

Electricity bills are set to adopt a more detailed itemised format to improve pricing clarity to users, and an energy efficiency incentive is also being introduced. Under this incentive, domestic users who consume 1,000 kWh or less each month will not be affected by the new tariff implementation, the ST said. Non-domestic users using under 200 kWh a month will also benefit from the incentive.

Additionally, the time of use (TOU) scheme has been updated to include extended off-peak hours from 10 pm to 2 pm on weekdays and all day on weekends in order to encourage consumption during low-demand periods.

Previously, only commercial users had the option to be on TOU billing, but it’s unknown whether domestic users can now have peak and off-peak rates. It’s likely that we will find out tomorrow when the new tariff rates are announced by TNB.

To preserve social welfare aspects, the government will offer special tariffs for agriculture, water services and rail operators, and also provide a 10% rebate for registered schools, places of worship and welfare homes. It will also continue the monthly RM40 electricity bill rebate programme for hardcore poor households registered under e-Kasih.

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