Understanding The New (2014) Electricity Tariff

The new electricity tariff for Peninsular Malaysia, Sabah and Labuan will be implemented starting 1 January 2014. The minister in charge has announced the new tariff in terms of average price increase. Well averages can be used most of the time to sum up changes but in this case I think it is inappropriate, or maybe misleading.

Tariff rates (current and new) are actually structured into usage blocks, and each block are priced differently. So it is not accurate if we simply average the tariff increase. To understand the tariff you need to see the details.

Below I include a table comparing the existing and new tariff (starting 2014) for domestic customers, taken from TNB (Tenaga Nasional Berhad).

Tariff A - For Domestic Customers (Peninsular Malaysia)

Consumption per month	Current Rates ( Dec 2013)	New Rates (1 Jan 2014)
The first 200 kWh (1 - 200 kWh)	21.80 sen/kWh	21.80 sen/kWh
Next 100 kWh (201 - 300 kWh)	33.40 sen/kWh	33.40 sen/kWh
Next 100 kWh (301 - 400 )	40.00 sen/kWh	51.60 sen/kWh
Next 100 kWh (401 - 500 kWh)	40.20 sen/kWh
Next 100 kWh (501 - 600 kWh)	41.60 sen/kWh
Next 100 kWh (601 - 700 kWh)	42.60 sen/kWh	54.60 sen/kWh
Next 100 kWh (701 - 800 kWh)	43.70 sen/kWh
Next 100 kWh (801 - 900 kWh)	45.30 sen/kWh
Next kWh (901 kWh onwards)	45.40 sen/kWh	57.10 sen/kWh
The minimum monthly charge is RM3.00

As you can see the rate for the first 300kWh under the new tariff is the same as the existing rate, hence if you use 300kWh or less per month, your electricity bill will not increase.

I prepared a table below to help you estimate the increase (if any) in your bill coming January 2014. The table shows some selected billing amounts under the current tariff, and what the amounts would be under the new 2014 tariff.  It also shows the increase percentage.

Current Electricity Bill (Dec 2013)	Bill Under New Tariff (Starting Jan 2014)	Increase	Consumption
RM77 or less	RM77 or less	0 %	300 kWh or less
RM90	RM94	4.2 %	333 kWh
RM100	RM107	7 %	358 kWh
RM120	RM133	10.4 %	408 kWh
RM150	RM171	14.0 %	482 kWh
RM200	RM233	16.7 %	603 kWh
RM300	RM359	19.7 %	833 kWh
RM400	RM483	20.8 %	1054 kWh
RM500	RM609	21.8 %	1274 kWh
RM1000	RM1237	23.8 %	2375 kWh

Calculations in the table are based on prorated factor of 1.

Looking at the table, we can conclude that the rate of increase of you billing amount depends on your electricity consumption. The more electricity you use, the bigger the rate of increase will be on your bill.

Examples (please see table):

• If your current bill is RM77 or less, then (if you electricity consumption stays the same) come January 2014 it won't change i.e. no increase.
• If your current bill is RM120, the (if you electricity consumption stays the same) starting 2014 it will become RM133, increased by 10.4 percent.

Hopefully this article helps you understand the implications of the new electricity tariff on your billing amount. Nothing we can do to stop the tariff from being implemented, what we can do is plan and strategize to minimize its impact on our finance.