The Energy Commission’s (ST) Automatic Fuel Adjustment (AFA) rate for September 2026 has been set at +3.67 sen per kWh, down slightly from +3.80 sen/kWh in August 2026.
The underlying cost pressure continues to ease. According to Single Buyer, the AFA for September is 3.67 sen/kWh (RM375 million), down 14% from 4.28 sen/kWh (RM452 million) in August – and the second straight month the computed surcharge has fallen. Unlike in previous months, we could find no mention of any Kumpulan Wang Industri Elektrik (KWIE) subsidy in any announcement this time.
This is the fifth consecutive month that AFA has been positive. The KWIE cushion has swung around considerably over that stretch – RM91 million in May, RM87 million in June, RM206 million in July, RM51 million in August, but we have no mention of it this month.
Once again, the earlier projections overshot. When the August rate was published, TNB’s three-month outlook pencilled in +5.00 sen/kWh for September – yet the pre-subsidy figure came in at just 3.67 sen/kWh, before any KWIE support is counted. As TNB itself notes, the outlook is an estimate to help customers plan, and the eventual figure is frequently lower once actual fuel costs, the true-up and the KWIE subsidy are reconciled.
Looking ahead, TNB’s latest three-month projection has been revised down sharply once more: the AFA outlook is now +3.36 sen/kWh for October, +2.81 sen/kWh for November and +5.48 sen/kWh for December – a marked retreat from the +6.81 and +7.50 sen/kWh floated for October and November just a month ago. The near-term trend is finally pointing down, though the December figure suggests the reprieve may not last through year-end.
The fuel price picture
Fuel prices in September remain above the baselines used in tariff setting – which is why a surcharge still applies – but the gap continues to narrow. Tier 2 gas fell again to 57.87 RM/mmBTU from 60.42 RM/mmBTU in August (base price: 46 RM/mmBTU), while Tier 1 gas held at 31.71 RM/mmBTU, still below its 35 RM/mmBTU base. Coal retreated to 122.85 USD/MT from 131.71 USD/MT (base price: 97 USD/MT), and although the ringgit weakened slightly to 4.0944 RM/USD from 4.0557 (still firmer than the 4.307 base rate), the coal price works out to a lower 23.05 RM/mmBTU in ringgit terms (base price: 19.14 RM/mmBTU).
What is Automatic Fuel Adjustment (AFA)?
AFA is a component of your electricity bill. 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.
That 3 sen threshold is very much in play right now. The computed AFA has exceeded the automatic band for four months running – 3.44 sen in June, 5.55 sen in July, 4.28 sen in August and now 3.67 sen in September – and when that happens, the Energy Commission refers the matter to the government, which decides how much of the cost is passed through to consumers. The split between what KWIE absorbs and what lands on your bill as the effective rate reflects that decision.
Introduced as part of the 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: +3.67 sen/kWh for the month of September 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 (+3.67 sen/kWh for September 2026; positive number, so it’s a surcharge).
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.
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
- June 2026: +2.59 sen/kWh
- July 2026: +3.59 sen/kWh
- August 2026: +3.80 sen/kWh
- September 2026: +3.67 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 the 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
Is there a way to escape from paying AFA?
Yes actually, there are two ways.
Firstly, you can 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 – and, since August 1, 2025, from the 1.6% renewable energy fund (KWTBB) levy too – on the green units you subscribe.
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.
