KOTA KINABALU: Sabah Electricity, the state utility company's cash flow is running at a deficit, said its chairman, Datuk Seri Wilfred Madius Tangau.
The Tuaran MP said that without immediate support, the company would be unable to pay independent power producers (IPPs) and fuel suppliers.
He said that Sabah Electricity currently generates only 20 per cent of the state's power, with the remaining 80 per cent supplied by IPPs at an average cost of 43 sen per kWh - a legacy issue that has troubled the company for years.
Sabah's electricity tariff has remained at a subsidised rate of 34.52 sen per kWh since 2014, despite increasing costs of power generation and procurement.
The situation has become more critical following a letter from the Energy Commission of Sabah, which indicated that the RM866 million electricity subsidy required for 2024 would not be granted due to fiscal constraints.
"There is absolutely no alternative. The chain reaction would impact hospitals, airports, water supplies, and essential services," he said in a statement, adding that a total blackout would go far beyond energy security - it would also threaten national security.
He also said that Sabah Electricity is facing higher costs this year in generating electricity.
The utility company's chairman, Datuk Seri Wilfred Madius Tangau, said Sabah Electricity had to spend more on diesel to generate power.
He said that this measure was taken as an immediate alternative due to delays in the commissioning of several new generation plants, especially the 66MW Tenom Pangi hydro plant, which was affected by a landslide and mudflow in October 2022.
In June, it was reported that repairs to the hydro plant, which sustained damage to its three turbines, would cost RM60 million.
Sabah Electricity also said that the plant is expected to resume full operations by the end of this month.
Due to the additional costs, Madius expressed hope that the federal government would provide additional subsidies for Sabah.
"Under the incentive-based regulation regime, any gap in generation costs approved by the regulators is to be recovered either by passing the costs to the consumer or by obtaining subsidies from the government."
Recently, the Energy Commission of Sabah agreed to consider segmenting electricity tariffs within the state.