Mon, 26 May 2003

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.