Letter to Editor
PREVIOUSLY, the government claimed that the new electricity tariff rates to be implemented today (July 1) are fairer for fellow Malaysians, as well as progressive.
They stated that these changes will not burden the business community, while domestic consumers will be able to pay lower rates. Despite this, public concern remains high.
The Malaysia Data Centre Alliance (MDCA) and the EU-Malaysia Chamber of Commerce and Industry (EUMCCI) have expressed that this decision would increase operational costs and contradict ongoing efforts to position the country as a data hub—an initiative that is currently being implemented in Johor, Penang, Kedah, Negri Sembilan and Sarawak.
According to media reports, both industry bodies have raised concerns over the government’s method of calculating rates, labelling it as “inaccurate” and “unfair”.
They argue that it could lead to double counting during periods of high demand, as different cloud providers often share overlapping customer bases.
These high operational costs are expected to reduce Malaysia’s attractiveness to foreign investors, who may opt to establish data centres or move their operations to other countries in the region.
The new electricity tariff will result in a 100.2% increase for high voltage during off-peak hours, from 20.20 sen/kWh to 40.43 sen/kWh, and a 162.3% rise in the maximum demand charges during peak hours for medium voltage industries, from RM37 to RM97.06 per kWh per month.
Naturally, industry stakeholders are reluctant to absorb these costs themselves and are likely to pass them on to the end consumer in the form of higher prices.
At the same time, the public is questioning why they are being asked to shoulder an increase in electricity tariffs when Tenaga Nasional Bhd (TNB) reported a net profit of RM1.44 bil for the second quarter ending June 30, 2024—a significant rise from RM327.9 mil during the same period last year.
With billions in profits, many are left wondering why there is still a need to raise electricity tariffs.
In light of this, MCA once again calls on the government to delay the proposed tariff hike and engage in meaningful discussions with relevant stakeholders and elected representatives. This dialogue should aim to establish a more equitable mechanism.
The issue should not be about raising tariffs arbitrarily to cover the country’s revenue shortfall and losses following the abolition of the GST—a system that was transparent, efficient and fair. ‒ July 1, 2025
Datuk Ir Lawrence Low is the MCA vice president and the party’s economic and SME affairs committee chairman.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
Main image: The Star
