KUALA LUMPUR — Tenaga Nasional Bhd’s (TNB) role at the centre of Peninsular Malaysia’s electricity system extends beyond that of a conventional profit-driven business, with tariffs, expenditure and returns governed by a regulated framework while the utility firm maintains critical power infrastructure.

Unlike businesses that can freely adjust prices in response to rising input costs, electricity tariffs in Peninsular Malaysia are determined under a framework administered by the Energy Commission (EC), which may determine tariffs and charges levied by a licensee under Section 26 of the Electricity Supply Act 1990, subject to the Minister’s (Energy Transition and Water Transformation) approval.

That oversight extends to the Incentive-Based Regulation (IBR) framework, which determines the prudent and efficient costs recoverable by regulated entities, establishes performance targets and provides for a fair and reasonable return on regulated assets.

As a result, electricity bills reflect not only the cost of generating power but also a regulated system governing tariffs, infrastructure investment and cost recovery.

The current Regulatory Period 4 (RP4), which runs from July 1, 2025 to Dec 31, 2027, provides the framework for determining the costs and revenues of regulated electricity businesses.

On June 20, 2025, the EC announced an average base tariff of 45.40 sen per kilowatt-hour (kWh) for RP4, lower than the 45.62 sen per kWh approved by the government in December 2024.