PLN to maintain electricity supply for low-income group

PLN to maintain electricity supply for low-income group

M. Taufiqurrahman, The Jakarta Post, Jakarta

State electricity company PT PLN announced on Sunday it would
continue providing services for low-income households despite
cuts in government subsidies.

"PLN, in fact, plans on distributing electricity services to
more than one million new customers in 2003. Of that figure, 80
percent will get the 450-VA (volt-ampere) electricity service,"
PLN president Eddie Widiono said at a press conference here.

He was responding to earlier reports suggesting that the
company planned to stop new connections for 450-VA electricity,
which is mostly subscribed to by low-income customers, due to
financial constraints.

The confusion emerged after Eddie made a statement last week
during a hearing with House of Representatives Commission VIII
for energy that PLN would be more selective in installing new
electricity connections, prompting speculation that the cash-
strapped company would cut off the supply of 450-VA electricity
and focus instead on more profitable customer categories.

Installing new connections for 450-VA customers is generally
seen as providing a poor return on the investment.

"We have set an annual target of an average of one million new
customers getting the (450-VA) electricity service," Eddie said
on Sunday.

He also said that of PLN's total annual expenditure of Rp 10
trillion (US$1.17 billion), Rp 1.2 trillion was allocated for
establishing new connections, including those in the 450-VA
category.

He said that if the one million annual target was increased,
PLN would have to request funds from the government to finance
the expansion of the connection infrastructure.

"Having said that, it is untrue that we are going to stop
supplying electricity for the poor. There must have been some
confusion about that," he said.

Currently, according to Eddie, 2.5 million people across the
country are on a waiting list to receive 450-VA electricity
service.

Eddie, however, acknowledged that the obligation to provide
the 450-VA service was hampering the company's efforts to improve
its financial performance.

"Currently, PLN has to shoulder considerable losses because
the total subsidy required to provide the 450-VA electricity
service reaches Rp 6 trillion, while the government has only
allocated Rp 4.51 trillion for the 2003 financial year," Eddie
said.

PLN, Eddie said, was exploring options for providing
electricity to the poor.

"We have approached some provincial governments to join our
effort to build power lines in some parts of the country," he
said, adding that provinces like Central Java, East Kalimantan
and Lampung had contributed some money to provide services for
new customers.

PLN has also urged independent power producers to deliver
electricity to 13 regions in the country that are still short of
power, he said.