Without Federal Funding, Sabah might suffer from statewide electricity outage

4 November 2024

PETALING JAYA: Sabah could face a statewide blackout starting next January if the federal government does not provide urgent financial support, warns Datuk Wilfred Madius Tangau, chairman of Sabah Electricity.

Tangau highlighted the inadequate funding allocated in the 2025 federal budget for Sabah’s power subsidy.

“I don’t think people understand how critical this problem is. The federal government cannot simply claim they don’t have the funds,” he stated.

Tangau's concerns follow a letter from the Energy Commission of Sabah indicating that the additional RM866 million electricity subsidy granted last year will not be available this year due to fiscal constraints.

Since 2014, Sabah’s electricity tariff has been fixed at a subsidised rate of 34.52 sen per kWh, despite rising costs of power generation and procurement.

Sabah Electricity generates only 20% of the state’s power, relying on independent power producers (IPPs) for the remaining 80%, which comes at a higher cost. This reliance creates a financial gap that is currently covered by federal subsidies.

Tangau, the chairman of Sabah Electricity and Tuaran MP, pointed out that rising costs—particularly due to increased diesel consumption—have further widened this gap.

The delays in new power generation projects have exacerbated the situation, particularly the 66MW Tenom Pangi hydro plant, which was affected by a landslide in 2022, forcing increased diesel usage to meet immediate power needs.

Tangau noted that the Sabah government has submitted an appeal to Putrajaya and the Finance Ministry to address the funding shortfall.

“Without immediate support, we won’t have the funds to pay the IPPs and fuel suppliers. If the fuel supply to the power plants is interrupted, the entire system could collapse,” he warned.

He emphasised that essential services—such as hospitals, airports, and water supply systems—are now at risk.

A statewide blackout, he cautioned, would not only jeopardise energy supply but also threaten national security.

“Consider the implications for security forces, the healthcare system, airport operations, water supply, telecommunications, transportation, and the entire government service network without electricity,” Tangau said.