The Energy Commission of Malaysia (ST – Suruhanjaya Tenaga) has announced a new electricity tariff structure for Peninsular Malaysia which will take effect from 1st July 2025 to 31st December 2027. The implementation is done under the Incentive-Based Regulation (IBR) framework in accordance with the provisions of Section 26 of the Electricity Supply Act 1990.

According to the regulator, the new changes will provide a more equitable and progressive electricity tariff for over 23.6 million domestic electricity users in Peninsular Malaysia, under the Regulatory Period 4 (RP4). It iterated that the 3 major changes cover the base electricity tariff rate, new tariff structure and fuel cost adjustment mechanism.

ST: Overall average cost of electricity will reduce by up to 19%

In December 2024, the government approved the implementation of Regulatory Period 4 (RP4) with a set base tariff rate of 45.62 sen per kWh. This marks a 14.2% increase from the current average tariff of 39.95 sen per kWh.

However, ST announced that the tariff rate for RP4 has been revised down slightly to 45.40 sen per kWh. With the latest revision, ST says the average overall electricity tariff cost is reduce by up to 19% compared to the regulatory RP3 period.

New Tariff Structure to include clear breakdown of energy, capacity, network and retail costs

The updated tariff structure will cover changes to categorisation of users for Domestic and Non-Domestic based on voltage (Low, Medium and High) and setting of each charges for energy, capacity, network and retail based on relevant costs

As a result, electricity bills will come in a more detailed itemised billing format, providing consumers with clearer visibility of energy, capacity, network and retail components.

As shown above, it looks like ST is doing away with the usual tiered usage breakdown that’s being implemented on the current bill. On the new bill, users will see a breakdown of total energy cost, adjustments for fuel cost, capacity, network cost and retail cost based on kWh used.

To recap, the current domestic tariff is split in 5 different tiers. The first 200kWh of electricity usage is priced at 21.8 sen per kWh, while the next 100kWh is priced at 33.4 sen per kWh.

This is followed by the third tier between 301 to 600kWh which is charged at 51.6 sen per kWh and subsequently from 601 to 900kWh at 54.6 sen per kWh. The highest tier, for electricity usage above 900kWh, is charged at 57.1 sen per kWh.

New structure to encourage efficiency and usage during off-peak hours

To encourage efficient consumption of electricity, a new Energy Efficient Incentive will be introduced for domestic users. Under the incentive, consumers who use 1,000kWh and below will not be impacted by the new tariff structure. Based on the sample bill structure from ST, the incentive will be reflected as a rebate in the monthly electricity bill.

Meanwhile, non-domestic low voltage users of 200kWh and below will also benefit from this new incentive.

To encourage efficient electricity consumption based on demand, the Time-of-Use (TOU) scheme has been streamlined and expanded with longer off-peak periods. This includes entire Saturday and Sunday, as well as 10pm to 2pm between Monday to Friday. As a comparison, the current off-peak TOU is from 10pm to 8am.

Currently, the TOU scheme is applicable to medium and high-voltage customers under commercial (C2), industrial (E2, E2s, E3, E3s), agriculture (H2) and mining (F2) tariff categories.

According to ST, users consume more electricity during off-peak periods, they will enjoy greater electricity bill savings compared to usage during on-peak hours.

The government has also agreed to several measures to ensure that social and welfare aspects are adequately addressed. This includes:

Specific tariffs for agriculture, water, sewerage services and rail operators.
10% rebate for schools, places of worship, and welfare homes.
RM40 monthly electricity bill rebate for eligible hardcore poor households (under the e-Kasih system).

ICPT to be replaced by AFA, updated every month

The current Imbalance Cost Pass-Through (ICPT) mechanism which allows cost adjustments based on changes in fuel and other generation-related costs will be replaced by Automatic Fuel Adjustment (AFA) mechanism.

Instead of reviewing and reflecting the fuel and generation cost via ICPT every six months, the new AFA mechanism enables an automatic generation cost adjustments monthly based on the current fuel prices and foreign exchange rates. Information on the latest AFA will be reported monthly on ST’s website.

So how much do I need to pay for electricity from 1st July 2025?

According to ST, the new tariff structure will be published on TNB’s tariff page on Saturday, 21st June 2025 at 12:00pm.

To find out how much you’ll have to pay for the next bill, users can also generate an estimated monthly bill cost using the updated tariff calculator. The new calculator is expected to go live latest by Monday, 23rd June 2025 on the same tariff page on TNB’s portal.

So do you need to pay more or less for your upcoming bill? It all depends on the final tariff structure that will be revealed tomorrow.

Based on the current tariff on TNB’s bill calculator, a domestic user with 600kWh of electricity consumption will have to pay RM219.80 inclusive of tax. Meanwhile, domestic usage of 900kWh would cost RM408.70 inclusive of tax.

ST says as a regulatory of energy in Peninsular Malaysia, it is committed to ensuring the implementation of tariffs based on fair, transparent and sustainable principles to meet the needs and balance the interest of all energy users. It added that the restructuring and streamlining marks an important step to realise and strengthen the nation’s energy transition agency that’s equitable and inclusive.