Mon, 10 Mar 2008

From: The Jakarta Post

By Joash Tapiheru, Yogyakarta
We faced a power crisis recently. Bad weather and high tides and waves on the sea stopped the coal supply needed by the steam-powered generator in Paiton, Cilacap.

The immediate solution projected was cutting-down the electricity supply in Java and Bali, which meant a shifting black out for particular areas on those two islands.

Fortunately, this crisis has passed. The weather has been getting better and the flow of coal supply to Paiton is back to normal.

However, citizens are complaining for the losses they suffered during the shifting black out in several areas in Java and Bali.

The government and the state-owned electricity company, PLN, tried to escape their responsibilities, citing natural causes as an excuse.

They also used the society as scapegoat.

PLN and the government insisted the crisis was due to the prodigal behavior of the society in consuming electric power, as expressed by Vice President, Jusuf Kalla.

Similar statements had been used for times by government and PLN officials, in addition to pointing toward unfavorable waters at sea last week.

The Minister of State Enterprises also insisted no one was held responsible for the crisis, because it was due to natural causes.

In the changing paradigm of public administration, though, the state control over the provision of public goods might be loosening, because the state needs the involvement of non-state actors, especially private enterprises.

However, the state is still held responsible for the availability of these, because it has the right to intervene in this sector through its regulatory function.

In this case, we may find the state and PLN must give their reasons and an explanation on two levels of policy.

First is the overall policy made by the government on the issue of public goods provision, or electricity power in this case.

Second, PLN has to explain and be responsible for its managerial policy, service policy and technological options taken.

The government, for this moment, has no clear or determined paradigm for its policy on the provision of public goods, especially in the energy sector.

Liberal trends do exist in our government's policy on this sector, but due to public resistance, the government is very careful about making and implementing its public sector privatization policies.

The private sector actually can play a bigger role in the business of power.

However, the government wants to maintain its control of this sector for its strategic value. Thus, privatization measures have only been taken partially, without creating a competitive market in the sector of electricity power provision.

The government should make a deliberate decision on this matter.

Maintaining the public sector fully under government control is a burdensome task.

Liberalizing the public sector is an unpopular policy with low political feasibility, and privatization does not necessarily lead to enhancement of public service quality.

Whatever the decision taken, it should not neglect the ethical foundation of state existence, its public service obligation.

Thus, the state may open a wider space and opportunity for private actors to engage themselves in this sector.

It is clear half-hearted privatization brings nothing but more problems without achieving the expected outcome.

The next problem, laid on the mismanagement and incomprehensive logic in PLN's policies.

The wide-spreading opinion comes from the government and PLN stating the electricity crisis has been caused by public consumptive behavior.

Such a statement neglects the fact for more than five years the PLN has been refusing to provide installation services for 450 watt electrical facilities.

The policy was made based on the argument most of the public tended to upgrade their household electrical infrastructure for higher power, whether 900 or 1350 watts.

In this case, the public's consumptive behavior has been deliberately incited by the PLN in order to raise their net-income through economy-of-scale calculations.

The cost for installation of 450 watt electrical facilities is nearly equal to the installation of the 900 watt facilities, but the PLN attached a higher charge to the consumers for the installation of the more powerful choice, because the 900 watt facility is not subsidized.

If the consumers could be driven to opt for the higher power facility, the PLN's net income would rise significantly.

From a liberal point of view, there is nothing wrong with such a policy if it was entailed with a policy for increasing production capacity.

Previous crises prove PLN's failure to meet increasing demands and comes as a consequence of its own policy.

It does not provide appropriate technological options for its electrical generators and does not have a comprehensive ability to anticipate the consequences of its own option.

The PLN decision of solely relying on a steam-powered power plant is at the core of the previous electricity crisis and others in the future.

The steam powered power plant the PLN has requires a huge amount of coal for its daily activity.

The coal is mined in various areas outside Java.

Instead of relying solely on a steam-powered power plant, the PLN might take the energy diversification policy.

In addition to a steam-powered power plant, the PLN may also rely on solar-powered one.

In Indonesia, we have potential solar energy year round.

In addition, the use of solar energy has minimum environmental effects in comparison to steam-powered technology.

The adoption of solar energy to our power plant does require huge initial investment.

However, this investment will soon reach its break-even point as the time passes, because solar-powered power plants need less maintenance and operational costs than the steam-powered one.

PLN needs to take an energy-diversification policy and solar-energy technology to complement the existing steam-powered power plant it has.

It will decrease our vulnerability to an electricity crisis in the future and contribute to the achievement of more sustainable development in general.

The writer is research staff with the Center for Indonesia Risk Analyst-CLPDS (CIRIS-CLPDS) and a lecturer's assistant with the Faculty of Social and Political Sciences at Gadjah Mada University, Yogyakarta.