KUALA LUMPUR: Improvements to the Automatic Fuel Adjustment (AFA) mechanism for next year are currently under review, says the Energy Transition and Water Transformation Ministry.
The review, conducted jointly by the Energy Commission, Tenaga Nasional Berhad (TNB) and Single Buyer, takes into account electricity consumption patterns across consumer categories, fluctuations in fuel and generation costs, and the impact on bills for both domestic and non-domestic users.
“Improvements will also assess fairer and more targeted approaches to cost allocation, including the causer-pays principle. This is to ensure that additional electricity generation costs are distributed more equitably among consumer categories,” the ministry said in a written parliamentary reply on Thursday (Nov 12).
It noted that the review balances consumer affordability with industrial sector competitiveness and the financial sustainability of the electricity supply industry.
Responding to Lim Guan Eng (PH-Bagan), the ministry said any decision on expanding bill protections would only be made once the comprehensive review is completed.
However, it welcomed proposals for improvement, including raising the monthly domestic electricity bill protection threshold to 1,000kWh, provided they are thoroughly examined for financial implications, funding sources, beneficiary numbers, and effectiveness in helping households cope with higher usage.
The ministry also highlighted the Sept 18 expansion of domestic bill protection, which raised the monthly usage threshold from 600kWh to 800kWh. Valid until Dec 31 this year, the measure exempts eligible users from AFA surcharges, retail charges, and the sales and service tax (SST).
According to the ministry, the initiative has benefited roughly 90%, or eight million, of domestic consumers in Peninsular Malaysia at a total cost of RM248mil.
This includes RM180mil in AFA adjustment costs, which were jointly borne by the government and TNB in September, with TNB fully absorbing the remaining costs from October to December. TNB is also fully absorbing retail charges through December, while the government is bearing the full cost of the SST exemptions over the same period.
