KOTA KINABALU, Nov 4 — Sabah Electricity (SE) chairman Datuk Seri Wilfred Madius Tangau has urgently called for federal government intervention for funding, warning that the state is at risk of a total blackout by January.
The Tuaran MP reiterated his concerns about the financial resources necessary to operate the utility company without additional subsidies from the federal government, especially following indications in the national budget that such subsidies would no longer be provided.
“I don’t think people understand how critical this problem is. The federal government cannot simply state they have no money now. This issue goes beyond energy security; it extends to national security as well,” he said in a recent press release.
Tenaga Nasional Berhad (TNB) owns 80 per cent of SE, while the Sabah government holds the remaining 20 per cent.
Tangau, who is also the honorary president of Upko, warned that the state’s power supply system is on the verge of collapse, as SE is operating at a loss and facing bankruptcy. The company has not revised its tariffs since 2014, despite rising costs in power generation and procurement.
“Currently, Sabah Electricity generates only 20 per cent of the state’s power, with the remaining 80 per cent sourced from Independent Power Producers (IPPs) at an average cost of 43 sen per kWh — a legacy issue that has plagued Sabah Electricity for years,” he added.
The existing tariff stands at a subsidised rate of 34.52 sen per kWh.
This 10 sen difference is covered by the federal government through tariff support and fuel subsidies, but this year, costs have surged as Sabah Electricity has had to spend more on diesel to mitigate power supply interruptions.
Tangau noted that despite repeated appeals, the federal government has stated it cannot consider an additional budget, leaving Sabah Electricity unable to sustain operations.
“I understand that the state government has sent an appeal letter to the federal government. Given the circumstances, Sabah Electricity will also be sending a similar appeal to the Federal Finance Ministry immediately.
“Sabah Electricity’s cash flow is running into a deficit. Without immediate support, we won’t have the funds to pay the IPPs and fuel suppliers, which would lead to a blockage of fuel supply to the power plant and result in a total system collapse.
“There are absolutely no alternatives. This chain reaction would affect hospitals, airports, water supplies, and essential services. Security forces, the medical and healthcare system, airport operations, water supply, telecommunications, transportation systems, and the entire government service network would be left without electricity,” he added.
This critical situation has been exacerbated by a letter from the Energy Commission of Sabah (ECoS), informing Tangau that the RM866 million electricity subsidy required for 2024 will not be considered due to fiscal constraints.
In last year’s 2024 Budget, the federal government had committed to providing Tariff Subsidy Support to Sabah for up to six more years. However, during the 2025 Budget presentation, there was no mention of the federal government's commitment to the Sabah Electricity 2030 Seven-Year Transformation Plan.
