PLN criticized for lack or rural electricity

PLN criticized for lack or rural electricity

A'an Suryana, The Jakarta Post, Anyer, Banten Province

Ida Sjachrul, a 40-year-old journalist from Palembang, South
Sumatra, could not hide her emotions during a two-day workshop on
the power sector organized by state electricity company PT PLN
last week in Anyer, Banten.

Soon after the moderator opened the question-and-answer
session, Ida stood and voiced complaints about the power service
in the province.

Power blackouts now routinely occurred in Palembang and its
surrounding areas, while many rural areas in the province still
had no access to electricity, 57 years after Indonesian
independence, she said.

This was ironic in view of the fact that South Sumatra was
abundant in coal, which was the main fuel source for generating
power in the country, she said.

"It is unfair that Java and Bali have enough power supplies
while South Sumatra, which regularly exports coal to the Suralaya
power plant, the largest power plant for Java and Bali, lacks
electricity," Ida pointed out.

She was referring to PLN's 3,400 megawatt (MW) coal-fired
power plant in Suralaya, Banten. The Java-Bali power grid has a
total supply of more than 18,600 MW.

Ida's statement reflects the grievances felt by many people
outside Java and Bali over the national power distribution
structure, which leaves a large gap between Java-Bali and other
islands in the country.

Currently, according to PLN's data, there are some 52 percent
of Indonesians who have access to electricity services, most of
whom live in Java and Bali.

Electrification ratio -- the percent of people having access
to power as compared to the population -- in Java and Bali has
reached 59.4 percent this year. In comparison, the
electrification ratio for Sumatra, Kalimantan, Sulawesi and the
Eastern parts of Indonesia, including Papua, were at 53.1
percent, 46.6 percent, 47.2 percent and 33 percent, respectively.

According to observers, the difference in the electrification
ratio was primarily because Java and Bali have more investment
than the other islands.

PLN is more interested in investing in Java-Bali than other
islands, because both Java and Bali offer better returns on
investment.

In Papua, for example, PLN spent Rp 470 billion in production
and investment costs in 2002, but only collected Rp 162 billion
in revenues. This means PLN suffered a loss of Rp 308 billion in
the area last year.

"This has discouraged the company from pouring more money into
the region," said Tulus Abadi of the Indonesian Consumers
Foundation (YLKI) during the workshop.

He also blamed the government for the gap in the
electrification ratio, saying that in the past, it had focused on
the development of power plants in Java and Bali while neglecting
other islands, on the ground that Indonesian development was
concentrated on these two islands.

"Of course, this is not right. It means that we favored the
residents of Java and Bali at the expense of others," said J.
Purwono, director for electricity business supervision at the
directorate general of electricity and energy.

Purwono said that the government had been trying to address
the problem since last year.

Steps that had already been taken by the government included
allocating "huge" funds to build small-scale power plants, such
as mini-hydro and diesel power plants.

"This year, funds allocated toward these projects amount to Rp
4.5 trillion," he said.

He added that the passing of the Electricity Law of 2002,
which liberalizes the country's power sector, could bring new
hopes for people living outside Java and Bali.

Under the law, Java, Bali and Batam will be opened to free
competition by 2007, allowing the government to focus its power
development program on other islands. The law also allows local
governments to invite investors to build power plants in their
respective areas.

These developments have made the government optimistic that
the country's electrification ratio will improve in the coming
years.

However, PLN president Eddie Widiono noted that the gap in the
electrification ratio would remain until 2010 unless local
governments in areas outside Java and Bali made extra efforts to
lure investors.

He predicted that by 2010, the electrification ratio in Java
and Bali would stand at 69.4 percent, while in Sumatra,
Kalimantan, Sulawesi and other areas, the ratio would be at 61.9,
52.9, 53.8 and 37.9 percent, respectively.

"In order to narrow the gap, local governments must strive
more diligently to attract private power investors, and should
not only depend on PLN. The local governments must be willing to
raise the electricity charges in their regions, in order to
attract investors.

"This is not a popular policy, but this is the only way that
regions can be self-reliant in power supplies," he said.

Power Provision in Indonesia

Java-Bali Sumatra Kalimantan Sulawesi Others

2003 2010 2003 2010 2003 2010 2003 2010 2003 2010
=================================================================
Sales(TWh) 77.1 126 10.1 16.3 2.8 4.5 2.8 4.4 3.3 5.3
Customers(M) 21.6 27.3 5.4 7.1 1.5 2.0 2.0 2.6 1.6 2.1
Capacity(GW) 18.6 28.3 3.0 3.0 0.7 1.3 0.8 1.3 0.5 1.1
Elec.Ratio(%) 59.4 69.4 53.1 61.9 46.6 52.9 47.2 53.8 33 37.9
=================================================================

TWh: Terrawatt hour M: Million GW: Gigawatt
Source: PLN