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Electricity Pricing Framework
Components of IBR
Overview
Under the IBR framework, the electricity in Peninsular Malaysia is made up of two main components, namely the base tariff and Automatic Fuel Adjustment (AFA) mechanism.
Base Tariff
The base tariff reflects the efficient cost of supplying electricity. It covers:
- Fuel Prices
- Capital expenditure (CAPEX) and operating expenditure (OPEX) for transmission, distribution, Grid System Operation (GSO), Single Buyer (SB) dan Customer Service (Retail)
- A fair return on the regulated asset base of transmission, distribution, SO, SB and Retail
Power purchase cost charged by generators (including the base fuel price) to the SB
Automatic Fuel Adjustment (AFA)
The AFA allows monthly generation charge adjustment to reflect variations in:
- Fuel prices
- Cost under Power Purchase Agreements (PPAs) and Service Level Agreements (SLAs), and
- Renewable Energy displaced costs and other generation costs
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IBR RP4
IBR RP4 (Incentive-Based Regulation, Regulatory Period 4) is the fourth cycle of Malaysia's electricity tariff regulation framework. Effective on 1st July 2025 until December 2027
Improvements to the Electricity Tariff Schedule in Peninsular Malaysia effective 1 July 2025
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Revision of Tariff Categories Based On Supply Voltage Level Connection
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Revision of Charges in the Tariff Schedule to Be More Transparent and Reflective of the Cost Structure
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Peak and Off-Peak Periods Revised to Reflect Current System Demand Conditions
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