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Sabah Electricity considers area-based tariffs to improve service, address rising costs

KOTA KINABALU: Newly-rebranded Sabah Electricity is considering implementing different tariffs for various areas in the state.

The utility company's chairman Datuk Seri Wilfred Madius Tangau said the board is exploring a "segmented" consumer tariff approach.

"We are studying this. If there are areas with low System Average Interruption Duration Index (SAIDI), we might look into different tariffs based on the level of service.

"However, about 13 of these areas are of low socioeconomic status, which we regard as part of our corporate social responsibility in terms of offering lower tariffs.

"These are some of the areas where we appreciate federal

government subsidies, as these islands are places where we couldn't otherwise conduct business," he told the media after launching the rebranding of the state-owned company at Wisma KWSP here.

However, when asked whether the company would impose non-subsidised rate for T15 households, Madius said that for now, there was no clear indicator about the group yet.

Madius, who is also Tuaran member of parliament, said the company has been urging regulators and the federal government to revise the tariff.

He added that the current tariff of 34 sen per kWh has not been revised for more than 20 years and is even cheaper than purchasing electricity from independent power producers.

"We do not receive any grants. So, how do we increase our revenue… there is also inflation. Even our debt to the Finance Ministry is reaching RM2 billion.

"When the tariff is revised, we won't need to rely on subsidies (from the federal government). After that, we could also run the company like a real business," he said, adding that the company also requires funds to upgrade its 5 km electricity cable.

He also highlighted other significant challenges, such as illegal electricity connections in squatter settlements, costing an estimated RM60 million in losses annually.

"To address the root of the issue, SESB has implemented an Independent Power Distributor (IPD) project using prepaid meters to manage electricity in high-risk areas for theft," he said.

"The IPD project was first piloted in Kampung Forest, Sandakan, with plans to expand it to other squatter areas across Sabah, including Kota Kinabalu, Tawau and Lahad Datu.

"SESB will work with a concession company approved by the Sabah government to supply electricity to these areas at an unsubsidized rate of approximately 47 sen per kilowatt-hour."

Since the project's inception, it has shown positive results.

In Kampung Forest, for instance, over 970 users now participate in the prepaid meter system, yielding RM36,000 in recent bills and saving SESB approximately RM327,000 by reducing outages and vandalism.

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