TNB announces higher base electricity tariff for 2025-2027, raises capex to ensure reliable supply

• This marks a 14.2% increase from 39.95 sen/kWh set in RP3 (2022-2024). The increase will be effective July 1.

KUALA LUMPUR (Dec 26): Peninsular Malaysia's base electricity tariff has been set at 45.62 sen per kilowatt hour (kWh) in the three-year regulatory period 2025-2027 (RP4), said Tenaga Nasional Bhd (TNB) (KL:TENAGA).

This marks a 14.2% increase from 39.95 sen/kWh set in RP3 (2022-2024).

The increase will be effective July 1, the utility giant said. The rates in the first half of 2025 (1H2025) have been maintained at current levels, according to a separate statement by the Ministry of Energy Transition and Water Transformation (Petra) earlier this month.

"Any differences from January to June 2025 will be funded through Kumpulan Wang Industri Elektrik [KWIE]," TNB said in its filing.

The power industry's regulatory period review establishes, among others, the expected coal and gas prices that would determine the base electricity tariff in the three-year period.

Other components include the amount of capital expenditure (capex) that TNB can spend in its regulated businesses of transmission and distribution (T&D), and the rate of return that is allowed on those regulated assets.

For RP4, TNB's regulated business capex has been set at RM42.82 billion, while operating expenditure (opex) is set at RM20.78 billion. Compared with RP3, capex was RM20.55 billion while opex was set at RM17.69 billion.

The regulatory rate of return, meanwhile, has been maintained at 7.3%, unchanged from RP3, it added.

TNB noted that generation costs remain the largest component of the electricity tariff, with gas and coal continuing to be the primary fuel sources for electricity generation during this period.

“Any additional generation costs resulting from higher fuel prices for electricity supply will be passed through via the imbalance cost pass-through [ICPT] mechanism,” it said.

The ICPT allows TNB to pass through uncontrollable fuel and generation costs after a six-month lag, subject to government approval.

Therefore, TNB said it remains “neutral” as it believes there will be no impact on its business operations or financial position.

“Through RP4 implementation under IBR [incentive-based regulation], TNB commits to ensure a reliable and continuous supply of electricity to our customers, enhance customer service level and facilitate the nation's energy transition agenda,” it added.

Shares of TNB settled up 10 sen or 0.71% to RM14.18 on Thursday, giving the group a market capitalisation of RM82.43 billion. The counter is up more than 40% this year.

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