FMM welcomes electricity tariff restructuring but calls for review of high-voltage rates
THE Federation of Malaysian Manufacturers (FMM) has welcomed the government's recent electricity tariff restructuring under Regulatory Period 4 (RP4), which it says introduces greater transparency and encourages better demand-side management.
However, it has urged a review of the high voltage (HV) time-of-use (TOU) tariff structure to ensure Malaysia remains competitive regionally.
In a statement, FMM noted that the RP4 rebasing exercise, which reflects current fuel costs, results in an overall tariff reduction of 19%, with 70% of medium voltage customers expected to see lower bills based on current usage patterns.
The government's RM5 billion allocation to absorb fuel cost adjustments in the first half of 2025 was also acknowledged.
FMM particularly lauded the move to extend off-peak hours by 80%, from 70 to 128 hours weekly, including weekends.
'FMM greatly welcomes the increase in the off-peak hours… which FMM has been advocating for the past decades,' it said.
The introduction of the Automated Fuel Adjustment (AFA), replacing the previous Imbalance Cost Pass-Through (ICPT) mechanism, was also seen as a positive step toward better reflecting real market energy prices.
However, FMM raised concerns over the revised HV TOU structure, noting that under the new model, the higher the voltage, the higher the cost – a departure from regional practices where high-voltage users typically benefit from lower per-kWh rates and a wider spread between peak and off-peak charges.
The gap between peak and off-peak rates has narrowed from 40% previously to below 10% under the new structure.
'In this regard, FMM calls for a review on the tariff structure for HV TOU category to ensure that the tariff remains competitive and attractive in the long term for the high voltage users,' said FMM president Tan Sri Datuk Soh Thian Lai.
FMM also called for further announcements on renewable energy schemes, including enhancements to the Green Electricity Tariff, to support industrial decarbonisation.
It further urged the government to explore additional support measures, such as targeted incentives for strategic industries like iron and steel. — TMR
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