“TNB announces a 14.2% raise in Peninsular Malaysia’s base electricity tariff for RP4 (2025-2027), with new rates set at 45.62 sen/kWh effective July 1, 2025. Tariff hike factors in fuel costs, increased capex, and energy transition goals.“
Kuala Lumpur, 27th Dec 2024, 11.00am – Tenaga Nasional Bhd (TNB) has revealed that the base electricity tariff for Peninsular Malaysia during the Regulatory Period 2025-2027 (RP4) will be set at 45.62 sen per kilowatt-hour (kWh). This marks a 14.2% increase from the current 39.95 sen/kWh under RP3 (2022-2024).
The new tariff rate will take effect from July 1, 2025, although electricity rates for the first half of 2025 will remain unchanged. Any differences in costs incurred between January and June 2025 will be covered by the Kumpulan Wang Industri Elektrik (KWIE), according to TNB’s statement to Bursa Malaysia.
Key Determinants of RP4 Tariff
The revised tariff reflects updated forecasts for coal and gas prices, which are the primary fuel sources for electricity generation in Malaysia. Additionally, it includes allowances for TNB’s regulated capital expenditure (capex) and operating expenditure (opex) over the three-year period.
For RP4:
- Capex is set at RM42.82 billion, nearly doubling the RM20.55 billion allocated in RP3.
- Opex is projected at RM20.78 billion, up from RM17.69 billion in RP3.
- The regulatory rate of return remains unchanged at 7.3%.
TNB emphasized that generation costs remain the largest component of electricity tariffs. Any increase in generation costs due to higher fuel prices will be passed on to consumers via the Imbalance Cost Pass-Through (ICPT) mechanism, which adjusts tariffs every six months with government approval.
TNB’s Commitment to Reliability and Energy Transition
TNB assured stakeholders that the RP4 implementation under the Incentive-Based Regulation (IBR) framework will not impact its business operations or financial position. The company remains committed to ensuring a reliable and continuous power supply, improving customer service, and supporting Malaysia’s energy transition goals.
“Through RP4, we aim to facilitate the country’s shift towards renewable energy while maintaining operational excellence and service reliability for our customers,” TNB stated.
Stock Market Performance
TNB’s shares rose by 10 sen (0.71%) to close at RM14.18 on Thursday, giving the utility giant a market capitalisation of RM82.43 billion. The stock has performed robustly this year, with gains of over 40% year-to-date.
