Many people assume that Malaysia’s electricity tariff was set by Tenaga Nasional Berhad (TNB). However, it was determined by our Malaysian Government through the Energy Commission (EC) via a mechanism called Incentive Based Regulation (IBR) framework introduced on 1 January 2014.

The framework was implemented to ensures Malaysians have access to reliable and affordable electricity. The IBR’s mechanism was composed of two components structured through different elements in order to achieve fairness in electricity prices. These two components were Base Tariff and Imbalance Cost Pass Through (ICPT).

The base tariff consists of fixed overhead, operational costs and generation costs which reviewed by Energy Commission (EC) every three years. Whereas, Imbalance Cost Pass Through (ICPT) was a tariff that is reviewed every 6 months by Energy Commission (EC) according to the global fuel price fluctuations.

The days of 2020 during COVID-19 pandemic when fuel was relatively cheap due to roads and airports relatively empty were long gone. As businesses and industries start to reopen, demand for fuel is increasing, leading to fuel prices soared to record highs.

The increase in fuel price putting the electricity generation sectors under strong pressure and it was beyond the Malaysian government`s control. In Peninsular Malaysia, more than 90% of the electricity generated uses fuel and the cost has increased as high as 75% with recent fuel hike.

To allow TNB to move forward providing reliable electricity to the nation, Malaysian government has given its approval for Tenaga Nasional Bhd (TNB) to implement higher Imbalance Cost Pass-Through (ICPT) surcharge for the period of Jan 1 to June 30, 2023.

On 16th December 2022, YB Tuan Nik Nazmi Nik Ahmad, the Minister of Natural Resources, Environment And Climate Change (NRECC) made an announcement on ICPT implementation for period 1 January 2023 – 30 June 2023 is as follows:

Medium voltage (MV) and High voltage (HV) customers among industry participants including multinational corporations will face a substantial surcharge at the rate of 20 sen per kwh which is 440% hike from RM0.037 per kwh.

Fortunately at this moment there will be no changes in Domestic Residential Tariff A, Micro, Small & Medium Enterprises (MSMEs) Tariff B, D, Agriculture H, H1 and H2 Electricity Rate.

The recent ICPT implementation managed to maintain the rebate of 2.00 sen per kWh for all domestic customers and surcharge of 3.70 sen per kWh for non-domestic customers (Tariff B, D H, H1 and H2). However, we are unsure that the rate will be the same on next announcement after the upcoming review by Energy Commission (EC) in July 2023.

Are you affected with the ICPT rate hike or experiencing high electricity bills recently? Please do feel free to consult us for mitigation plan on how to safe your electricity bills and to lower down your electricity cost. Contact us at One Alpha for free consultation to get ideal solution to hedge the electricity rate hike.

You may get in touch with our key person, Hardeep Singh Gill at +6019-207 3899 or email us at

References :

* TNB Bills Examples are from TNB Website