Bills for Amendments to Enable Sabah’s State Autonomy over Electricity Supply Regulation Passed

On 3 October 2022, Malaysia’s Dewan Rakyat (House of Representatives) passed two Bills on proposed amendments to the Renewable Energy Act 2011 and the Sustainable Energy Development Authority Act 2011. Both Bills contain identical provisions which give the Minister responsible for matters in relation to electricity supply the power to suspend the operation of the whole or any part of the said Acts in parts of Malaysia.
Following the passing of the Bills, the Minister of Energy and Natural Resources, Datuk Seri Takiyuddin bin Hassan, issued a statement1 explaining that the amendments are necessary in order to enable a smooth transfer of electricity supply regulation to Sabah. Currently, electricity supply is regulated at Federal level. However, once these amendments come into force, the Sabah State Government will have autonomy over the state’s electricity supply regulation including matters such as the development of renewable energy.
The Bills will next be presented to the Dewan Negara (Senate) of the Malaysian Parliament whereafter they will be submitted for Royal Assent and gazetted to become law.
The forthcoming amendments to the Renewable Energy Act 2011 and the Sustainable Energy Development Authority Act 2011 mark only the beginnings of the journey to Sabah’s autonomy with regards to electricity supply regulation2. A key step is the requirement for an order to be issued by the Yang di-Pertuan Agong under Article 95C of the Federal Constitution to extend the legislative or executive powers of the Sabah State Government to enact its own laws to regulate electricity supply.
Further, towards realising Sabah’s autonomy, the Chief Minister of Sabah, Datuk Seri Hajiji Noor, had previously announced3  plans to: 
  1. Set up Sabah’s own energy commission4; and 

  2. Reacquire Sabah Electricity Sdn. Bhd.5, the utility company in Sabah. 
It will be a while yet before Sabah can be fully autonomous, as the development and implementation of a state-level framework for electricity supply regulation is no small task. It also remains to be seen how existing projects in Sabah that are in the early years of their lifecycle and which are presently under the purview of the Energy Commission will be managed. What is clear now, however, is that change is coming – and it will be significant.
Alert by Richard Khoo (Partner) and Rachel Chiah (Senior Associate) of the Energy Practice of Skrine. 

1 The media statement issued by the Minister of Energy and Natural Resources is available here.
2 Note that the Electricity Supply Act 1990 and the Energy Commission Act 2001, which are legislation related to electricity supply regulation, already contain provisions allowing the Minister the power to suspend operation of such Acts in parts of Malaysia.
3 “Sabah to set up own Energy Commission, acquire SESB” published in the News Straits Times on 25 August 2022 and available here.
4 Currently, the regulator for the energy industry in Sabah, as well as in Peninsular Malaysia, is the Energy Commission of Malaysia which is a statutory body established pursuant to the Energy Commission Act 2001.
5 The present shareholders of Sabah Electricity Sdn. Bhd. are Tenaga Nasional Berhad, the electricity utility company in Peninsular Malaysia (80%) and the Sabah State Government (20%).

This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact