Why your electricity bill is not as simple as what TNB pays for power

KUALA LUMPUR, Sept 27 — 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.