Prorate Factor by TNB: What is it and how it works?

One new buzzword during this MCO is TNB’s prorate factor. Since 18 March 2020, TNB has suspended all meter reading as our Malaysian Government enforced the Movement Control Order (MCO) as a response to the Covid-19 pandemic. Meter reading activities resumed on 15 May 2020 resulting in 91 days of unbilled electricity usage.  

The Problem

Many Malaysians got a shock when receiving their latest-over-91-days TNB bill where their electricity bill has tripled, some even up by 5 folds. TNB attributed this to their users being home more often and consuming much more electricity. However, most Malaysians were still up in arms demanding for an explanation from TNB. They claim that TNB was being unfair by taking a 91-day meter reading which bumps up their electricity usage to Tier 5 rate of RM0.571 per kWh.

Source: www.tnb.com.my

The argument is that if TNB were to take monthly meter readings, as they normally would do, electricity usage won’t go into the expensive Tier 3-5 rates of over RM0.50 per kWp. This is when TNB introduced the term “Prorate Factor”, and prorated their bill during the MCO period.

What is Prorate Factor?

TNB’s prorated bill is done by multiplying their rates with a prorate factor. For example, if TNB were to take your meter reading after 91 days, TNB will divide this with 30 days, resulting in a prorate factor of 3.03. Multiply this prorate factor with the tariff blocks, resulting in larger tier rates as such:

  • Tier 1: first 607 kWh RM 0.218 per kWh
  • Tier 2: next 303 kWh RM 0.334 per kWh
  • Tier 3: next 909 kWh RM 0.516 per kWh
  • Tier 4: next 909 kWh RM 0.546 per kWh
  • Tier 5: 2728 kWh onwards RM 0.571 per kWh

The Energy Commission approves this method of calculation. “The same method is being used by utility companies in other countries in Europe and Australia.” Said Megat Jalaluddin Megat Hassan, the TNB chief retail officer

Essentially, prorate factor makes your electricity bill fairer for all parties. You might not have realised this, but there may have been times when your prorate factor was lesser than 1. This happens when your meter was read earlier than 30 days, which results in smaller tariff blocks. With this, you will be paying slightly more to TNB as compared to calculating without a prorate factor

Example Prorate Bill Provided By TNB

TNB Prorated Bill
Source: TNB

The non-prorated version is what most Malaysians are accusing TNB of doing, where all three months usage is calculated in one bill. Instead, with normal monthly billing, the bill should be around:

  • Average usage per month: 950 kWh / 3 months = 316 kWh per month
  • Electricity bill per month: (200 kWh x RM0.218) + (100 kWh x RM0.334) + (16 kWh x RM0.516) = RM 85.26
  • Electricity bill for the 3 months: RM85.26 x 3 = RM255.78

This is why many Malaysians feel that they have overpaid their electricity bill by RM424.15 – RM255.78 = RM168.37

But with TNB’s prorate factor to calculate a prorated bill, you’ll only be paying RM254.17 for your past 3 month’s electricity bill. Evidently, this prorated method of calculation is a much fairer method of calculation.

What Can You Do If Your Bill Is Still High?

After understanding how TNB prorates their bill and you still feel unfairly billed, firstly you should ask TNB for an explanation. You can contact TNB via TNB Careline at 1-300-88-5454, or drop them an email at tnbcareline.tnb.com.my. You can further escalate the matter by making an official complaint to the Energy Commission.

Subsequently, you can be in control of this situation if it happens again by going solar and generating your own electricity. Plus, solar PV systems usually comes with a smart meter that continuously monitors your electricity consumption. This allows you to adjust your electricity consumption immediately the moment you have used more electricity than you would have liked — which is the problem most faced during this MCO period.

Here’s an actual NEM bill sent over by one of our clients:

For more information, leave us your contact here and our representative will be in touch with you. Alternatively, drop us an email at info@nextenergy.my or call us at 017 726 6177.