Bull Bear Market / Energy
Would a TNB Competitor Cut Your Electricity Bill? Why Malaysian Power Costs What It Does
A viral Threads post argued that a TNB competitor would not lower bills, and that the real issue is how generation works. We checked it against the Energy Commission's and TNB's own figures: what is in a bill, why fuel dominates, how the AFA works, and where competition could actually matter.
Akmal Alif · 11 October 2026 MYT
Energy is a new corner of EXEPERT's Bull Bear Market section, for the power, fuel and grid economics that sit behind markets, data-centre booms and household bills. It starts with a question many Malaysians asked in September 2026, when electricity bills jumped.
Since May 2026 every monthly bill in Peninsular Malaysia has carried a fuel surcharge, after coal and liquefied natural gas prices rose sharply. Peak demand hit a record 21,949 MW on 9 September (Malay Mail, 2026). On 17 September the government raised the usage threshold below which households are shielded from the surcharge from 600 kWh to 800 kWh a month, for September to December (TNB, 2026d).
Online, two explanations spread fast: Tenaga Nasional Berhad (TNB) needs a competitor, or TNB's privatisation caused this. On 15 and 16 September, the Threads user @xshkayx posted a 12-part thread arguing that neither explanation holds. When @ali_oyah replied that TNB's privatisation was probably the cause, the author answered that the real issue is the closed model of power generation.
This post checks the thread's claims against the regulator's and TNB's own figures, and explains where the money in a bill actually goes.
The thread's argument in brief
The thread, written in a mix of Malay and English, makes a simple case:
TNB's business has three parts: generation, transmission and distribution. Generation already has competition from independent power producers (IPPs). Competition in transmission makes little sense, and distribution could have competitors.
The recent price rises come from generation and fuel costs, not from the grid. Ten new retailers would still use TNB's transmission lines and still buy the same expensive electricity.
Most of TNB is owned by public institutions such as the Employees Provident Fund (EPF), Khazanah and KWAP.
In the Peninsula, TNB generates about 57% of electricity and IPPs about 43%, and about 71% of a bill is generation cost.
Bills rose because of the Automatic Fuel Adjustment (AFA), which passes changes in fuel costs into bills every month, as rebates when costs fall and surcharges when they rise.
Its conclusion: competition already exists where it matters most, in generation, and costs are still high, so the problem is the underlying cost of generation and the way generation is organised.
Who does what in Malaysian electricity
Peninsular Malaysia, Sabah and Sarawak run separate systems. The thread and this post are about the Peninsula.
History. The Central Electricity Board was set up in 1949 and became the National Electricity Board (LLN) in 1965. TNB took over on 1 September 1990 as a company wholly owned by the government, and listed on Bursa Malaysia on 28 May 1992 (TNB, n.d.). IPPs followed: the first power purchase agreement (PPA), with YTL, was signed in March 1993 for 21 years (TNB, 2015).
Generation comes from TNB's own power stations and from IPPs, under long-term contracts.
The Single Buyer, a ring-fenced unit set up in 2012, buys all that power on an actual-cost basis, and the Grid System Operator decides which plants run (Single Buyer, n.d.).
Transmission, distribution and retail belong to TNB and are regulated by the Energy Commission (Suruhanjaya Tenaga, ST) under incentive-based regulation, which sets TNB's allowed spending and return for each regulatory period.
Sabah is served by Sabah Electricity (SESB), 83% owned by TNB and regulated by the state's own Energy Commission of Sabah since 2024. Sarawak has its own state-owned, vertically integrated utility, Sarawak Energy.
What is inside a bill
For the current regulatory period (July 2025 to December 2027), ST set an average base tariff of 45.40 sen/kWh (Bernama, 2025a). TNB's investor materials break it down (TNB, 2026a):
Component | Sen per kWh | Share |
|---|---|---|
Generation: fuel and power purchases | 32.42 | About 71% |
Networks and retail | 12.98 | About 29% |
Average base tariff | 45.40 | 100% |
The July 2025 restructure shows the same split on a household bill. A domestic customer using up to 1,500 kWh a month pays an energy charge of 27.03 sen/kWh, a capacity charge of 4.55 sen/kWh (the fixed cost of keeping power stations available, largely payments under PPAs) and a network charge of 12.85 sen/kWh, plus a RM10 monthly retail charge that is waived for small users. On top of that sit the monthly AFA and an Energy Efficiency Incentive rebate of up to 25 sen/kWh for low users, tapering to zero above 1,000 kWh. Households with smart meters can also choose a time-of-use tariff with cheaper off-peak hours (TNB, 2026a).
Why generation costs what it does
Generation is the biggest slice, and fuel is the biggest part of generation.
Fuel mix. In 2025, coal produced 58.5% of the Peninsula's electricity and gas 33.5%, according to ST (Malay Mail, 2026). Hydro and solar made up most of the rest.
Imported coal. Almost all of the coal is imported, nearly two-thirds from Indonesia and about a fifth from Australia, and it is priced in US dollars (The Edge, 2026a).
Two-tier gas. About 80% of the gas burned for power is domestic gas at capped prices; about 20% is imported LNG at market prices (The Edge, 2026a).
The fuel bill. Fuel for the Peninsula, for TNB's plants and payments to IPPs, cost RM28.4 billion in TNB's 2025 financial year (TNB, 2026b).
The 2026 shock. The Economy Minister cited coal rising from about US$130 a tonne in July 2026 to US$148 by 10 September, and LNG approaching US$30 per million British thermal units (Malay Mail, 2026).
When fuel prices and the US dollar rise together, the cost of every unit generated rises, whoever owns the power station.
How the AFA works
The AFA replaced the old Imbalance Cost Pass-Through (ICPT) in July 2025. The ICPT was set every six months; the AFA is set every month, adjusting for fuel prices and exchange rates against the benchmarks built into the base tariff. Adjustments within a band of about 3 sen/kWh happen automatically; anything larger needs government approval (TNB, 2026a). TNB stresses that the mechanism is cost-neutral to the company: "AFA is not a new charge and does not generate profits for TNB" (TNB, 2026c).
The monthly rates show both directions:
Month | AFA (sen per kWh) | Month | AFA (sen per kWh) |
|---|---|---|---|
Jul 2025 | 0.00 | Mar 2026 | −2.15 |
Aug 2025 | −1.45 | Apr 2026 | −0.47 |
Sep 2025 | −1.10 | May 2026 | +1.38 |
Oct 2025 | −6.50 | Jun 2026 | +2.59 |
Nov 2025 | −8.91 | Jul 2026 | +3.59 |
Dec 2025 | −6.42 | Aug 2026 | +3.80 |
Jan 2026 | −4.99 | Sep 2026 | +3.67 |
Feb 2026 | −2.77 | Oct 2026 | +3.61 |
Negative figures are rebates. Sources: The Edge (2026b); paultan.org (2026a, 2026b); TNB (2026c).
From July 2025 to September 2026, the AFA returned RM3.1 billion in rebates and collected RM0.8 billion in surcharges. The Electricity Industry Fund has also put RM435 million towards softening the surcharges (TNB, 2026c). Domestic customers using 600 kWh or less a month are exempt from the AFA altogether, in both directions. For September to December 2026 that threshold is 800 kWh, which covers about nine in ten households, with TNB absorbing an estimated RM120 million to RM150 million of the cost (Malay Mail, 2026). Businesses pay the AFA regardless of usage.
Did privatisation cause high bills?
Not in the way the question usually implies.
TNB's return is capped. Under incentive-based regulation, ST sets TNB's allowed return on its regulated assets; for the current period it is 7.3%, the same as the last (Malay Mail, 2024). Fuel and power purchases pass through the Single Buyer at actual cost, and fuel swings go through the AFA, not into TNB's regulated profit.
TNB is mostly publicly owned. TNB's June 2026 figures show 65.4% of its shares held by government-linked investment funds and agencies: EPF 24.9%, Khazanah 17.4%, Permodalan Nasional Berhad 12.9%, KWAP 7.6% and others 2.6% (TNB, 2026a). The thread's figure of 58% understates it.
There is a fair point inside the privatisation argument, though. The long-term PPAs signed with IPPs from the 1990s onwards fixed how generation is bought. In 2019 the then energy minister, Yeo Bee Yin, argued that the combination of PPAs and fuel pass-through gave IPPs no incentive to find cheaper fuel, because fuel costs flowed straight into tariffs (The Edge, 2019). That is close to what the thread calls the closed model of power generation.
Would a retail competitor lower bills?
Retail is the thinnest slice of the bill: roughly the RM10 retail charge plus part of the networks-and-retail 29%. The grid itself is a natural monopoly; building a second set of pylons and cables would raise costs, not cut them.
The thread's own arithmetic makes the point. If a rival could somehow cut the cost of transmission and distribution by half, the saving would be about 15% of the bill at most, and less in practice, because transmission would still be TNB's. Competition in distribution already exists in a limited form: ST licenses shopping malls, hotels, commercial complexes and industrial parks to distribute electricity to their tenants, but the tariff they charge must not exceed the approved tariff (Suruhanjaya Tenaga, 2026).
Some replies to the thread pointed to telecoms, where a new rival pushed the incumbent to cut broadband prices. The difference is where the cost sits: in broadband, most of the cost is in networks and service, which competitors can improve; in electricity, most of it is fuel, bought on world markets.
Other countries' experience is a caution. In Singapore's open electricity market, about a third of households switched retailer in the first months after full opening in 2019, but six retailers left the market between October and December 2021 when wholesale prices spiked, and the share of households on the regulated tariff rose from about half to about 58% (Ministry of Trade and Industry, 2019, 2022). In the United Kingdom, 28 suppliers failed after June 2021 as gas prices rose nearly six-fold; the National Audit Office estimated the cost at about £2.7 billion, or around £94 per household customer, spread across everyone's bills (National Audit Office, 2022). Retail competition did not protect customers from a fuel shock.
Where competition could matter: generation and fuel
The reforms that target the real cost drivers have focused on generation, fuel and grid access.
MESI 2.0. In 2019 the Cabinet approved a ten-year plan to stop signing new IPP contracts, make generators buy their own fuel, move towards competitive capacity and energy markets, and open the grid to third parties (The Edge, 2019). In July 2020 the government put it under review, citing the cost, including RM60 billion to RM80 billion of PPA obligations that would have shifted to the government (The Edge, 2020).
CRESS. Since September 2024, the Corporate Renewable Energy Supply Scheme has let companies buy green power from developers over TNB's grid for a system access charge. The charge for firm supply started at 25 sen/kWh, was cut to 20 sen in August 2025, and to 14 sen in September 2026 to attract more projects (Bernama, 2025b; The Star, 2026a).
The energy transition. The National Energy Transition Roadmap targets 70% renewable installed capacity by 2050 and no new coal plants (Ministry of Economy, 2023). About 7.1 GW of coal contracts expire between 2029 and 2033, with up to 9 GW of new gas planned by 2032, according to TA Research (The Star, 2026b). How that gas is priced will shape bills for decades.
Data centres. Data centres used 9.28% of the country's electricity by mid-August 2026, and their actual load roughly doubled in a year (The Star, 2026b). Regulators have introduced a dedicated tariff category for them and a user-pays approach to grid reinforcement (Malay Mail, 2026).
Checking the thread
Claim in the thread | Verdict | What the figures show |
|---|---|---|
TNB generates about 57% of Peninsular electricity and IPPs about 43% | Confirmed, by energy generated | About 57.5% and 42.5% in FY2025. By installed capacity, TNB's share is lower, 52% to 55% |
About 71% of a bill is generation cost | Confirmed | 32.42 of the 45.40 sen/kWh base tariff |
58% of TNB is held by public institutions | Understated | 65.4% in June 2026 |
The top shareholders are EPF, Khazanah, KWAP, ASB and others | Broadly right | Khazanah is the largest single account and EPF the largest holder overall; PNB and AIA are also in the top ten |
The AFA only applies to domestic use above 600 kWh | Confirmed | Raised to 800 kWh for September to December 2026; businesses pay the AFA regardless |
Rebates ran from July 2025 to April 2026, surcharges since May 2026 | Nearly right | July 2025 was zero; rebates ran August 2025 to April 2026 |
Malls, buildings and industrial parks can hold distribution licences | Confirmed | Under ST guidelines, at no more than the approved tariff |
The Energy Efficiency Incentive still applies | Confirmed | Up to 25 sen/kWh off for low users, tapering to zero above 1,000 kWh |
The thread's tone drew criticism in the replies, but its substance holds up. A new retailer cannot change the price of coal, LNG or the US dollar. What could change bills over time is how generation is bought and fuelled: shorter or competitive contracts, cheaper fuel sourcing, more renewables and storage, and shifting demand away from peak hours.
What to watch
The November AFA rate. TNB's outlook in October pointed to a rate of about +4.27 sen/kWh for November (paultan.org, 2026b).
January 2027. The surcharge threshold is due to return to 600 kWh unless the government extends the 800 kWh shield.
The next regulatory period, from 2028, and whether the generation reforms shelved in 2020 return.
References
Bernama. (2025a, June 20). New electricity tariff: Over 23.6 mln domestic users to enjoy lower bills. https://www.bernama.com/en/news.php?id=2436381
Bernama. (2025b, August 29). Govt revises SAC, CAC rates. https://www.bernama.com/en/news.php?id=2461885
Malay Mail. (2024, December 27). TNB eyes higher base tariff for 2025-2027 in Peninsular Malaysia. https://www.malaymail.com/news/malaysia/2024/12/27/tnb-eyes-higher-base-tariff-for-2025-2027-in-peninsular-malaysia-starting-july-next-year-amid-energy-transition-push/161193
Malay Mail. (2026, September 27). Why your electricity bill is not as simple as what TNB pays for power. https://www.malaymail.com/news/malaysia/2026/09/27/why-your-electricity-bill-is-not-as-simple-as-what-tnb-pays-for-power/236697
Ministry of Economy. (2023). National Energy Transition Roadmap. https://www.ekonomi.gov.my/sites/default/files/2023-09/National%20Energy%20Transition%20Roadmap_0.pdf
Ministry of Trade and Industry. (2019, August). Written reply to PQ on percentage of households switching suppliers in the Open Electricity Market. https://www.mti.gov.sg/newsroom/written-reply-to-pq-on-percentage-of-households-switching-suppliers-in-open-electricity-market/
Ministry of Trade and Industry. (2022, October 4). Written reply to PQ on household consumers' choice. https://www.mti.gov.sg/newsroom/written-reply-to-pq-on-household-consumers--choice
National Audit Office. (2022, June 22). The energy supplier market. https://www.nao.org.uk/press-releases/the-energy-supplier-market/
paultan.org. (2026a, September 2). TNB AFA rate September 2026 set at +3.67 sen/kWh. https://paultan.org/2026/09/02/tnb-afa-rate-september-2026-set-at-3-67-sen-kwh/
paultan.org. (2026b, October 1). TNB bill AFA rate October 2026 set at +3.61 sen/kWh. https://paultan.org/2026/10/01/tnb-bill-afa-rate-october-2026-set-at-3-61-sen-kwh/
Single Buyer. (n.d.). Our journey. Retrieved October 11, 2026, from https://singlebuyer.com.my/about-single-buyer/our-journey
Suruhanjaya Tenaga. (2026). Guidelines on public distribution licence application (GP/ST/No.65/2026). https://www.st.gov.my/sites/default/files/2026-07/Guidelines-on-Public-Distribution-Licence-Application.pdf
The Edge. (2019, September 17). Govt to liberalise power industry. https://theedgemalaysia.com/article/govt-liberalise-power-industry
The Edge. (2020, July 22). Putrajaya to review MESI 2.0 power sector reform. https://theedgemalaysia.com/article/govt-review-mesi-20-power-sector-reform
The Edge. (2026a, April 2). Brace for gradual rise in electricity prices, EC warns. https://www.tnb.com.my/assets/newsclip/02042026e1.pdf
The Edge. (2026b, April 1). Higher electricity costs in April under automatic fuel adjustment. https://theedgemalaysia.com/node/798161
The Star. (2026a, September 18). Govt strengthens CRESS with 14 sen/kWh firm supply rate. https://www.thestar.com.my/news/nation/2026/09/18/govt-strengthens-cress-with-14-senkwh-firm-supply-rate
The Star. (2026b, September 15). Energy sector set for fresh investment wave. https://www.tnb.com.my/assets/newsclip/15092026a.pdf
TNB. (n.d.). History. Retrieved October 11, 2026, from https://www.tnb.com.my/about-tnb/history/
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TNB. (2026a, September). Investor presentation. https://www.tnb.com.my/assets/conference_materials/TNB_Investor_Deck_Sep_2026.pdf
TNB. (2026b, February). Analyst briefing 4QFY2025. https://www.tnb.com.my/assets/quarterly_results/Analyst_Briefing_-_4QFY2025.pdf
TNB. (2026c, September 15). Press release on the Automatic Fuel Adjustment. https://www.tnb.com.my/assets/press_releases/20260915_23_bi.pdf
TNB. (2026d, October 2). Press release on the 800 kWh AFA threshold. https://www.tnb.com.my/assets/press_releases/20261002_25_bi.pdf