Sabah Electricity Tariff and Subsidy Explained (2026)

Why is Sabah's electricity subsidised?

Because the tariff was set below the cost of supply and left there. The last revision before 2026 was in 2014. According to the state energy plan, SE-RAMP 2040, supplying each unit of electricity cost 43.83 sen/kWh for 2022 to 2024, while customers paid an average of 34.52 sen/kWh.

Power in Sabah is expensive to make. SE-RAMP says 64% of the cost of supply is generation, and the east coast still relies partly on diesel and medium fuel oil. It also lists subsidies that never appear on a bill:

• Fuel: diesel for power stations is subsidised at RM0.495 a litre and medium fuel oil at RM0.42 a litre.
• Gas: gas for power in Sabah is priced at RM6.40/MMBTU, against an assumed market price of RM15/MMBTU, so the gas supplier forgoes revenue.
• Solar: large-scale solar is subsidised at a displaced cost of 21 sen/kWh plus a spinning reserve cost of 3.5 sen/kWh.

How much does the subsidy cost?

SE-RAMP reports that the federal government spent RM2.89 billion subsidising Sabah's electricity supply from 2016 to 2021: RM1.27 billion (44%) on fuel and RM1.62 billion (56%) mainly on the Tariff Support Subsidy and large-scale solar.

Source: SE-RAMP 2040, printed p.32, from SESB records. The jump after 2017 came from the Tariff Support Subsidy, first given in 2018.

For 2022 to 2024, the approved subsidy was 9.31 sen for every unit: a Tariff Support Subsidy of 4.68 sen/kWh (RM884 million) plus a fuel and large-scale solar subsidy of 4.63 sen/kWh (RM876 million), RM1,760 million in total, with no tariff change for customers.

For the years ahead, SESB said in January 2026 that the federal government has allocated RM849 million for 2026 and 2027. The Chief Minister put federal support at about RM700 million a year.

What changed on 1 February 2026?

SESB raised the average base tariff from 34.52 to 39.70 sen/kWh, the first revision since 2014. The Chief Minister described it as an increase of about 15%. SESB cited rising operating and maintenance costs and the need for continued investment in the grid.

Source: SESB Tariff Booklet effective 1 February 2026, Schedule 1 (Tariff DM, domestic). Minimum monthly charge RM5.00. Small shops and offices on the low-voltage commercial tariff (CM1) pay 43.75 sen/kWh for the first 500 kWh and 47.04 sen above that.

How much will my bill be?

Each rate applies only to the units inside its band, so a home using 300 kWh pays 22.02 sen for the first 200 units and 37.76 sen for the next 100. Here is the energy charge for some typical monthly use, before any fuel-cost adjustment (ICPT), taxes or other charges:

Our calculation from SESB's 2026 domestic rates.

SESB said about 85% of domestic customers use up to 600 kWh a month and would see an increase of up to RM27. Poor households registered under e-Kasih can receive a rebate of up to RM40 a month, according to SESB.

How is the tariff set now?

Since January 2022 Sabah has used Incentive Based Regulation (IBR). The regulator approves a "revenue requirement" covering the cost of supply with an allowed return. The base tariff is reviewed every three years, and changes in fuel and generation costs can be passed through every six months under the Imbalance Cost Pass-Through (ICPT), as a surcharge or a rebate. Since 2023 the regulator is the Energy Commission of Sabah (ECoS).

SE-RAMP also proposes Enhanced Time of Use (ETOU) tariffs, with peak, mid-peak and off-peak rates, so that customers who shift use to off-peak hours pay less. Sabah's existing off-peak schemes are the Off-Peak Tariff Rider and the Sunday Tariff Rider. Status as of September 2026: we have not found an ETOU tariff for Sabah in the 2026 booklet's domestic schedule.

Where is the tariff heading?

SE-RAMP's target is a "sustainable electricity tariff" by the end of 2030, which means less subsidy, and it says energy prices need to "gradually reach market parity". It also says Sabah needs to explore a targeted subsidy programme for lower-income groups (p.108), so that help goes to the households most affected by higher prices.

The plan is a direction, not a price list: under IBR the next base-tariff review comes at the end of each three-year period, and the ICPT can move bills in between. For the wider energy plan, including blackouts, see Sabah's power plan explained and why Sabah has so many power cuts.

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