Tuesday, 1 July 2025

New electricity tariff looms

Looks like we’re heading towards changes in our electricity bills starting today. I’ve been following this for some weeks now, and from July onwards, electricity tariffs in Peninsular Malaysia will be adjusted monthly instead of every six months. That’s the big shift announced by the Energy Commission (Suruhanjaya Tenaga).

The idea is to make our bills reflect fuel and generation costs more accurately and in real time. The base tariff, which stays fixed for a few years, has now been set at 45.4 sen per kilowatt-hour (kWh), up from 39.95 sen. This is part of what's called Regulatory Period 4 (RP4), which runs until the end of 2027.

On top of that, there’ll be monthly adjustments to the final tariff depending on fuel prices. If fuel costs go up, the tariff can also go up, but by no more than three sen per kWh each month. Anything beyond that will need Cabinet approval. So it’s not entirely free-floating, but still a lot more responsive than before.

Also, our electricity bills are going to look a bit different. The current five-tiered domestic tariff structure is being replaced with a more itemised one. Usage will now be broken down into energy, capacity, network and retail charges. It’s meant to be more transparent, though I suspect most people won't be bothered with the details unless something looks unusually high.

There’s a small bonus for those who don’t use much electricity. Households using 1,000 kWh or less a month will qualify for a monthly rebate under the Energy Efficiency Incentive (EEI) which is reflected on the bill. And for small businesses like shops or offices using below 200 kWh a month, there's a similar rebate too. It’s to encourage everyone to be a little more energy-conscious.

The Time-of-Use (TOU) scheme is also being expanded. Entire weekends now count as off-peak hours, plus a long window from 10pm to 2pm on weekdays. If we can shift our high-usage appliances or machines to those periods, we might save a bit more.

While domestic users may not feel the pinch straight away, businesses might. Under the new structure, users are now grouped by voltage levels (low, medium, and high) with heavier users paying more across the board. Manufacturers and service providers who rely heavily on machinery or air-conditioning may face tighter margins due to both the base rate hike and monthly volatility.

This is where companies may want to rethink their electricity use. For some, installing solar panels might be viable but that’s not always an option, especially for those renting space or operating in multi-tenant buildings. Still, there are other energy-saving solutions out there.

The good news is that exploring these alternatives doesn’t just help cut electricity bills. It also supports ESG (Environmental, Social and Governance) commitments. More companies are being asked to show progress on sustainability. Improving energy efficiency is one of the simplest, most measurable things that can be done. Whether reporting to the board, regulators or just doing the right thing,  it all counts.

Anyway, electricity bills are going to look a bit different soon. It might take some adjusting. But for those who can adapt and take energy seriously, it could turn out to be a real opportunity in disguise.