KUALA LUMPUR: Despite a recent 14.2% electricity tariff hike, Tenaga Nasional Berhad’s (TNB) profit margin remains regulated at 7.3%, ensuring excess profits are returned to consumers through the Electricity Industry Fund (QI).
Deputy Energy Transition and Water Transformation Minister Akmal Nasrullah Mohd Nasir said that this structure, in place since 2018, aimed to balance TNB’s stability and service quality with fair returns to major shareholders, while introducing mechanisms like the automatic fuel adjustment (AFA) to reduce overall costs for most users.
“The government’s use of the incentive-based regulation (IBR) mechanism, implemented since 2014, allows for the setting of the average base tariff for electricity in Peninsular Malaysia.
“The tariff is reviewed every three years, and any profits exceeding the regulated 7.3% margin are redistributed to consumers,” he said in reply to Lim Guan Eng (PH-Bagan) during the Minister Question Time in Dewan Rakyat on Wednesday (Aug 13).
The recent tariff adjustment, effective July 1, 2025, introduced the AFA mechanism, which replaces the previous imbalance cost pass-through (ICPT) system.
“This change aims to lower overall costs by 19%, benefiting both domestic and industrial users, though some non-domestic users may experience increases.
“The adjustments ensure TNB remains stable, providing quality service to consumers while offering reasonable returns to major shareholders like Khazanah Nasional and KWSP,” added Akmal Nasrullah.
Akmal Nasrullah noted the company’s investments in the national grid, smart meter installations and supporting renewable energy integration as part of the nation’s energy transition agenda.
TNB has also engaged in various corporate social responsibility (CSR) initiatives, supporting community projects and environmental sustainability.
Addressing an additional question by Lim about TNB’s substantial profit growth, Akmal Nasrullah noted that the company’s profitability is linked to its investments in national grid upgrades, smart meter installations and supporting the energy transition agenda.
“TNB’s financial health is crucial for sustaining its role as a key utility provider,” he said.
In response to suggestions from Lim to stagger the tariff increase to alleviate burdens on businesses, Akmal Nasrullah reiterated the government’s regulatory measures, emphasising that excess profits are redistributed back to consumers.
“The government’s approach ensures that while TNB can invest in necessary infrastructure, the benefits are also passed down to the end-users,” he said.
Rushdan Rusmi (PN-Padang Besar) further queried about mechanisms to directly return profits to consumers, such as through bill rebates. Akmal Nasrullah said that the revised tariff structure provides incentives for energy-efficient users and that a significant portion of consumers are already experiencing lower bills due to these changes.
“The plan ensures 85% of TNB’s domestic users benefit from reduced costs under the current usage levels,” he said, highlighting the government’s efforts to support both the energy sector’s growth and consumer interests.
