High fuel prices finally hit EVs – AFA rate for May 2026 set at +1.38 sen/kWh after RM91m KWIE fund subsidy

The inevitable has happened – the rising prices of fuel have finally caught up to the electricity supply chain, as May 2026 sees the AFA rate set at a positive number for the first time in the history of the new electricity tariff regime.

While 3-month AFA forecasts expected May 2026’s AFA to be -0.39 sen/kWh, the actual May 2026 AFA is +1.38 sen/kWh, which is an increase over April 2026’s -0.47 sen/kWh AFA rate.

In fact, the +1.38 sen/kWh rate is a subsidised rate, with RM91 million of funds taken from Kumpulan Wang Industri Elektrik (KWIE) as a mitigation step to reduce the impact of a rising electricity tariff. This RM91 million pays for a 0.86 sen reduction off the true May 2026 AFA rate of +2.24 sen/kWh.

Not just about the rising trend of fuel costs

Interestingly, increased fuel costs are not the only reason for the raised AFA rate. It seems we are paying for an unexpected increase in generation costs in February 2026, caused by the unavailability of two coal plants and lower lake levels at Temenggor and Kenyir.

A higher percentage of gas generation and the use of alternate fuels required to meet February 2026 demand levels had increased actual generation costs by 11%, so this is “charged back” to the consumer in May 2026.

What is the new AFA forecast moving forward

TNB forecasts Q3 2026 AFA to all be in the positive range, from +2.92 sen/kWh in June, dropping to +0.22 sen/kWh in July and finally up to +3.93 sen/kWh in August.

You might be asking – is there any way to escape AFA? Yes actually, there are two ways.

Firstly, you can use use less electricity. AFA is waived for total consumption of 600 kWh and below a month.

Secondly, there is something called Green Energy Tariff (GET) which you can opt for. This exempts you from AFA. However, GET itself costs 5 sen/kWh if you lock in for a 1 year subscription, 4 sen/kWh for 2 years, and 3 sen/kWh for 3 years, thus it only makes economic sense to subscribe to it if AFA is more than what GET costs across the entire period that you subscribe it for.

AFA and new TNB tariff recap

To recap, AFA replaces the previous Imbalance Cost Pass-Through (ICPT) and is automatically calculated as either a surcharge or discount of up to 3 sen/kWh depending on fuel prices – this is revised monthly, with any larger changes (beyond 3 sen) requiring cabinet approval.

Introduced as part of TNB’s Electricity Tariff Restructuring that took effect from July 1, 2025, the AFA is one of five components or ‘charges’ used to calculate your electricity bill:

• Generation charge: 27.03 sen/kWh for total consumption of 1,500 kWh and below per month or 37.03 sen/kWh for total consumption more than 1,500 kWh per month. This covers the actual cost of generating electricity from power plants.
• Capacity charge: 4.55 sen/kWh. This covers the cost of maintaining sufficient electricity supply capacity.
• Network charge: 12.85 sen/kWh. This covers the cost of operating and maintaining the grid and the local network to deliver electricity.
• Retail charge: RM10/month; waived for total consumption of 600 kWh and below a month. This is a fixed cost for metering, billing and customer service.
• AFA rate: +1.38 sen/kWh for the month of May 2026; waived for total consumption of 600 kWh and below a month.

You can use our TNB Bill Calculator tool to get a rough estimate on how much your electricity bill will be for the month. Essentially, if you use over 1,500 kWh a month, you add the generation, capacity and network charges (totalling 54.43 sen/kWh) to retail charge (RM10) and the AFA rate (-0.47 sen/kWh for April 2026; negative number, so it’s a discount).

Alternatively, if your usage is below 1,500 kWh a month, it’s 44.43 sen/kWh plus the retail charge and AFA rate. For total consumption of 600 kWh and below a month, it would only be 44.43 sen/kWh – retail and AFA charges are waived.

TNB Time of Use scheme tariff rate and off-peak discount; click to enlarge

Here’s a list of the monthly AFA rates so far:

• July 2025: 0.00 sen/kWh
• August 2025: -1.45 sen/kWh
• September 2025: -1.10 sen/kWh
• October 2025: -6.50 sen/kWh
• November 2025: -8.91 sen/kWh
• December 2025: -6.42 sen/kWh
• January 2026: -4.99 sen/kWh
• February 2026: -2.77 sen/kWh
• March 2026: -2.15 sen/kWh
• April 2026: -0.47 sen/kWh
• May 2026: +1.38 sen/kWh

Domestic consumers who use less than 1,000 kWh a month can enjoy a discount called ‘Insentif Cekap Tenaga’ or ‘Energy Efficiency Incentive’. The discount provided is relative to consumption (higher usage, lower incentive), with the maximum discount being 25 sen/kWh.

Domestic users who have smart meters also have option to enter the Time of Use (ToU) scheme, allowing them to change their electricity usage patterns and take advantage of lower tariff rates during off-peak hours to enjoy savings on their monthly bill.

The scheme has two time zones, with off-peak timings being from 10pm to 2pm from Monday to Friday and throughout the day (24 hours) for weekends. Peak hours are from 2pm to 10pm on weekdays. Here are the energy charges under this scheme:

For usage of 1,500 kWh and below per month

• Peak tariff: 28.52 sen per kWh
• Off-peak tariff: 24.43 sen per kWh

For usage above 1,500 kWh per month

• Peak tariff: 38.52 sen per kWh
• Off-peak tariff: 34.43 sen per kWh

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