KOTA KINABALU: Datuk Seri Wilfred Madius Tangau, chairman of Sabah Electricity, has issued a warning that the state may experience a complete blackout beginning in January unless immediate financial assistance is secured from the federal government.
With only a few months remaining, Tangau expressed grave concerns regarding the inadequate funding allocated for Sabah’s power subsidy in the latest national budget, as reported by the Borneo Post.
He stated, “I don’t think people understand how critical this problem is. The federal government cannot simply say they have no money now. This is not just about energy security, but by extension, national security as well.” Tangau, who also serves as the MP for Tuaran and is the honorary president of Upko, emphasized that the power supply system in the state is nearing a state of collapse.
Since 2014, the electricity tariff in Sabah has been maintained at a subsidized rate of 34.52 sen per kWh, despite the escalating costs associated with power generation and procurement.
Currently, Sabah Electricity generates only 20 percent of the state’s power, while the remaining 80 percent is obtained from Independent Power Producers (IPPs) at an average cost of 43 sen per kWh, a situation that has plagued Sabah Electricity for years.
Tangau pointed out that this cost disparity has been mitigated through tariff support and fuel subsidies from the federal government, which have been necessary to ensure a reliable power supply, even while incurring losses of 10 sen per unit of electricity.
“This year, the disparity in costs has significantly increased as Sabah Electricity has incurred higher expenses in procuring additional diesel to generate power.
“This measure was taken as a temporary solution due to delays in the commissioning of several generation plants, notably the 66MW Tenom Pangi hydro facility, which was impacted by a landslide and mudflow in October 2022,” he said.
Under the incentive-based regulatory framework, any discrepancies in the generation costs sanctioned by the regulators must be addressed either by passing the costs onto consumers or by seeking recovery from the government through subsidies.
Despite the Sabah state government’s requests for extra funding, the federal government has indicated that it is unable to accommodate the additional budget, leaving Sabah Electricity in a precarious position regarding its operational sustainability.
It has been communicated that the state government has submitted an appeal to the federal government. In response to the current circumstances, Sabah Electricity will also be sending a similar appeal to the Federal Finance Ministry without delay.
The cash flow of Sabah Electricity is currently in deficit. Without prompt assistance, there will be insufficient funds to compensate Independent Power Producers (IPPs) and fuel suppliers, which would lead to a halt in fuel supply to the power plants and ultimately result in a complete system failure.
There are no viable alternatives. Such a chain reaction would adversely affect hospitals, airports, water supplies, and other essential services, he cautioned.
Tangau emphasized that the consequences of a total blackout extend beyond energy security, posing a threat to national security as well.
He stated, “Consider the ramifications for security forces, the medical and healthcare system, airport operations, water supply, telecommunications, transportation systems, and the entire government service network in the absence of electricity.”
A prolonged power outage would severely disrupt essential services, potentially halting airport operations, interrupting hospital care, and affecting water treatment facilities, thereby impacting all sectors of society in Sabah. This critical situation has been exacerbated.
