Sabah Electricity Appeals For Federal Govt Financial Support

KOTA KINABALU, Nov 4  (Bernama) -- Sabah Electricity Sdn Bhd (Sabah Electricity) has insufficient funds and needs federal government financial support to ensure a sustainable power supply, said chairman Datuk Seri Wilfred Madius Tangau.

He warned of a statewide blackout starting January 2025 in a statement today unless the federal government provides urgent financial support.

“Imagine what would happen to security forces, the medical and healthcare system, airport operations, water supply, telecommunications, transportation systems, and the entire government service network without electricity,” Tangau, who is Tuaran MP and Upko honourary president said.

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The implications of a total blackout go far beyond energy security; it also threatens national security, he said.

He voiced his worries about the situation in the most recent national budget.

He said Sabah’s electricity tariff has remained at a subsidised rate of 34.52 sen per kilowatt-hour (kWh) since 2014, despite the rising cost of generating and purchasing power.

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Sabah Electricity, he said, currently produces only 20 per cent of the state’s power and buys the remaining 80 per cent from independent power producers (IPPs) at an average cost of 43 sen per kWh.

He said the federal government’s fuel and tariff support subsidies covered the cost difference to ensure a sustainable power supply, with a loss of about 10 sen per unit of electricity.

“However, this year, the difference in cost has grown bigger as Sabah Electricity had to spend more to purchase diesel to generate power.

“This is an immediate alternative to delays in the commissioning a few generation plants to come on stream, particularly the 66 megawatt (MW) Tenom Pangi Hydro which was affected by a landslide and mudflow in October 2022,” he said in a statement today.

Tangau said under the incentive-based regulation regime, any gap in cost was to be recovered from the consumer or the government by way of subsidy.

“I was made to understand that the Sabah government has sent an appeal letter to the federal government,” he said adding that  Sabah Electricity will also be sending a similar appeal letter to the Finance Ministry at Putrajaya with immediate effect.

He said Sabah Electricity’s cash flow is running into a deficit. Without immediate support, it will not have the money to pay the IPPs and fuel suppliers.

“Then the fuel supply to the power plant will be blocked and the entire system will collapse,” he said.

Tangau said a prolonged outage would cripple essential services, potentially grounding airport operations, interrupting hospital care, and disrupting water treatment facilities, impacting every level of society in Sabah.

-- BERNAMA