KOTA KINABALU: Sabah may experience a total blackout by early 2025 if the Federal Government ceases its electricity subsidy, warns Datuk Seri Madius Tangau (pic).
The Sabah Electricity (SE) chairman stressed this as a critical issue because SE currently operates on a subsidy basis.
Concerns are rising, especially after a letter from the Sabah Energy Commission (ECoS) informed him of two key points: first, the subsidy allocation for Sabah's electricity for 2024 will proceed as approved in the 2024 budget, and second, the RM866mil subsidy for 2024 cannot be considered at this time.
The letter cited the Federal Government's fiscal constraints as the reason for not providing additional allocation for Sabah's electricity needs.
Without receiving the minimum RM300mil Tariff Support Subsidy (TSS) this year, SE's cash flow will soon turn negative, leaving it unable to purchase power from independent power producers (IPPs).
"The Federal Government cannot simply say they lack funds. This impacts not just energy security but national security," said the Tuaran MP.
SE's financial position will hold only until Jan 2025, after which a complete blackout is a real possibility.
The electricity tariff in Sabah has been subsidised at 34.52 sen per kWh since 2014, despite rising costs in power generation and procurement.
Tangau explained that SE produces just 20% of the state's power, while the remaining 80% comes from IPPs at an average cost of 43 sen per kWh.
The cost difference is recovered through subsidies, but this year's increased expenses on diesel for power generation due to delays in plant commissioning have widened the gap.
In February 2024, SE will appeal to the Federal Finance Ministry for immediate support to avoid cash flow deficits.
Without financial aid, SE will struggle to pay IPPs and fuel suppliers, threatening to block fuel supply to power plants and collapse the entire system.
The resulting chain reaction could affect hospitals, airports, and essential services.
Tangau emphasised that the implications of a blackout extend beyond energy security, posing threats to national security.
A prolonged outage could cripple essential services, disrupt hospital care, and interrupt water treatment facilities, affecting all societal levels.
Tangau also noted that the federal government mustn't overlook Sabah's energy needs due to the high risk of neglect.
He recently raised these concerns in Parliament, pointing out that the 2025 budget lacks support for the Transformation Plan for Sabah Electricity 2030.
He urged the federal government to reconsider its subsidy allocations, reminding that electricity tariffs are government-determined, not solely by utility companies like SE.
