The government assures that domestic water tariffs will not increase due to data centre demand, with developers bearing infrastructure costs
KUALA LUMPUR: Domestic water tariffs will not be increased to meet the demands of data centre development.
Deputy Energy Transition and Water Transformation Minister Akmal Nasrullah Mohd Nasir said the government has decided that costs for upgrading electricity and water infrastructure will be fully borne by the developers.
This ensures no additional financial burden is passed on to consumers, particularly domestic users.
He said the development requires significant grid enhancement works under the Fourth Regulatory Period from 2025 to 2027.
This follows a committed demand of over 7,000 megawatts secured through agreements between data centre operators and Tenaga Nasional Berhad.
“The government has introduced a ‘user pays’ approach under the new tariff structure,” he said during the Dewan Negara’s oral question session.
He said data centre operators are required to bear the additional costs of strengthening grid infrastructure.
Akmal Nasrullah was replying to a question from Senator Datuk Rosni Sohar on the impact of data centres on national energy and water consumption.
The government has also introduced a dedicated Ultra High Voltage tariff category for data centres to ensure a stable electricity supply.
Water consumption for cooling systems has also risen with the growth of large-scale data centres.
The government is implementing a sustainable water supply management strategy to ensure increasing demand does not affect domestic users.
The National Water Services Commission has introduced Water Supply Guidelines for Data Centre Development, effective from September 1, 2025.
The guidelines outline technical requirements from planning to operational phases.
“Data centre operators are also encouraged to adopt green technologies,” Akmal Nasrullah said.
This includes high-efficiency cooling systems and water recycling to reduce reliance on treated water.
Responding to a supplementary question, he addressed public concerns over groundwater usage for a data centre project in Port Dickson.
He said groundwater extraction falls under state jurisdiction, and any objections should be directed to the relevant state authority. – Bernama
