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GEORGE TOWN: Businesses at the Kulim Hi-Tech Park (KHTP) are up in arms over a sudden hike in electricity tariff, with some warning that the move will cripple investments and make Malaysia less attractive to high-tech industries.
As of Jan 1, companies at KHTP had seen their electricity costs surge by up to 21%. Tenants were notified of the increase on Dec 31, 2024 – just a day before the hike took effect.
Electricity at KHTP is supplied by NUR Power, a private utility company with exclusive generation and distribution rights for the tech park. This means that the industrial tenants at the park do not receive electricity from TNB.
“This is shocking,” said a senior figure in the Penang-Kulim semiconductor industry.
“Businesses need time to plan, adjust budgets, and negotiate with customers. Instead, we were given just 24 hours’ notice. You can’t run a business with this level of uncertainty.”
A senior executive at one of the affected businesses said that electricity costs had risen by 19%, directly affecting the company’s cost structure.
“We are already implementing cost-cutting measures, but this sudden increase makes it even harder to manage (our business),” he said.
Another key player asked whether NUR Power would continue to increase tariffs without consultation, warning that this would “put the future of KHTP at risk”.
A European industrial player meanwhile said the new tariff structure had wiped out the cost advantage of using power during non-peak hours, forcing the company to reconsider its entire energy strategy.
He said while existing companies were unlikely to relocate immediately, many were reconsidering further investments in Malaysia.
Another executive at a semiconductor company which has been operating at KHTP for over 20 years said that while moving was not an option, the increased electricity tariff might affect the company’s future investments.
A key concern for the companies is NUR Power’s exclusive right to supply electricity at KHTP. Unlike companies outside the park, tenants cannot choose alternative providers or benefit from national energy-balancing mechanisms.
There is also frustration over access to renewable energy (RE). Companies at KHTP are unable to fully participate in government RE programmes such as the Corporate Green Power Programme which is available to TNB customers.
Recent government rules requiring battery storage for solar energy projects have also exacerbated the situation as batteries are costly and have a limited lifespan.
The Kulim Hi-Tech Park Industrial Tenants Association (KITA) and the Malaysia Semiconductor Industry Association (MSIA) called for immediate action on the issue.
“We are asking for the same treatment as TNB customers – a six-month moratorium before the new rates take effect,” KITA president Chong Nee Hwa said in a letter to the Energy Commission. KITA represents over 30 active industry members within the park.
MSIA meanwhile urged the government to review the tariff increase, introduce relief measures, and hold an urgent stakeholder meeting to address the issue.
“If Malaysia wants to remain competitive in the high-tech sector, energy prices must be stable, predictable, and fair. This tariff hike sends the wrong signal to investors,” said MSIA president Wong Siew Hai.
KHTP had attracted 53 investors from 11 countries as of September 2024. The industrial park currently provides jobs for 45,521 people.
FMT reached out to NUR Power last week and is awaiting a response.
Source: https://www.freemalaysiatoday.com/category/nation/2025/02/04/kulim-businesses-cry-foul-over-electricity-tariff-hike/