PETALING JAYA: The government has to explain the costs involved in the production of electricity before raising tariffs for the people, say interest groups.A proposed 14% increase in power tariffs may take effect in Peninsular Malaysia from July 2025, pending a decision by the government.
The groups said the tariff increase, which affects both industrial and domestic users, comes at a time of rising living costs.
Association of Water and Energy Research Malaysia president S. Piarapakaran called on the government to be transparent in the cost of producing electricity so as to ensure only efficient costs are passed on to the tariff.“For the Regulatory Period 4, the proposed base tariff increase by TNB (Tenaga Nasional Bhd) is about 5sen/kWh, which is higher than previous regulatory periods.
“Issues like the Green Electricity Tariff, standby charges for renewable energy plants and direct negotiations must also be addressed to prevent unnecessary costs for businesses and the public,” he said in an interview yesterday.
The division between industrial and domestic users also requires careful consideration, said Piarapakaran, who is also the chief executive officer of the Centre for Water and Energy Sustainability.
“Historically, industrial users have borne higher costs, often resulting in increased product prices passed on to consumers.
“About 80% of electricity generated is consumed by the non-domestic sector.
“This means an increase in electricity costs will impact the cost of living through a complex multi-tier method.
“The government’s policies in responding to that will reflect its ability to minimise cost impact and prevent profiteering.”
For domestic users, Piarapakaran said tiered pricing and rebates for lower consumption can provide some relief.
However, he said any increase will still affect households, particularly those in the middle-income bracket.
Piarapakaran also clarified the misconception that all domestic users have to pay 14% more for their electricity usage come July 2025.
“The proposed base tariff is an average cost that will require approval from the Energy Commission.
“Once the base tariff is set, tariff bands will be developed to capture the regulated revenue for different consumers (domestic, commercial and industrial),” he said.
Piarapakaran also called for mandatory energy-efficiency labelling and a Minimum Energy Performance Standard for appliances.
“The public and businesses must also realise that part of the energy wastage stems from incorrect design principles of premises, such as improper placement or sizing of air conditioners,” he said.
As for renewable energy – solar, hydro and wind – which is still intermittent now, Piarapakaran said it must be approached gradually to prevent consumers from being overburdened by costs.
“Increasing renewable energy will only heighten the intermittent risk to the grid.
“Every megawatt of renewable energy has a fossil fuel plant on standby, which is a cost to the system and eventually gets passed through to the tariff,” Piarapakaran said.
Federation of Malaysian Consumers Associations chief executive Saravanan Thambirajah echoed the need for a balanced approach by the government.
“Investments in renewable energy infrastructure such as solar farms are costly, and these costs often reflect in tariffs.
“Striking a balance is essential to ensure that consumers are not overburdened by rising costs during this transition,” he said.
As the potential removal of RON95 subsidies looms, Saravanan, who is also the Water and Energy Consumer Association of Malaysia president, said more inflationary pressures could exacerbate the situation.
“Production costs will rise, potentially driving inflation, which negates the benefits of the people’s wage adjustments.
“Many households may not be prepared for concurrent increases in electricity tariffs and other living costs,” he said.
Saravanan said the government must prepare a comprehensive strategy to mitigate these impacts and protect consumers from excessive cost increases.
