Effect Of COVID-19: Asked To Give Discount For Middle Class, PLN 'Raise Hands'

Illustration. (Photo: Instagram @pln_id)

JAKARTA - PT Perusahaan Listrik Negara (PLN) cannot provide incentives to 900 VA (non-subsidized) customers and 1300 VA customers. President Director of PLN Zulkifli Zaini explained that the budget for middle class incentives is very large, so that PLN's finances are unable to bear it.

Based on PLN data, said Zulkifli, the number of 900 VA (non-subsidized) subscribers reached 22.7 million with a monthly account of IDR 143,590, bringing the total to IDR 9.5 trillion. Then, the number of customers 1300 VA reached 11.7 million with a monthly account of Rp.221,631, so the total to be disbursed was Rp. 7.4 trillion.

"The total budget disbursed is Rp. 16.9 trillion per month. So, of course, it is beyond the capacity of PLN. We cannot," he said, at a hearing (RDP) with Commission VII, in Jakarta, Wednesday, April 22.

Previously, in the meeting, several DPR members questioned whether 900 VA (non-subsidized) and 1300 VA customers would also receive incentives. The reason is, currently the impact of the corona virus or COVID-19 has been felt by all groups.

According to Zulkifli, currently there has also been a decline in industrial demand due to the COVID-19 pandemic. Because of this, it is also very difficult for PLN to reduce or give discounts to 900 VA (non-subsidized) and 1,300 VA users.

"Regarding the tariff reduction, in the current situation it is really not easy for us to reduce the tariff. And we have to do a comprehensive assessment of PLN's revenues, PLN costs. That's what we are doing," he explained.

Zulkifli said the total budget spent to provide subsidies or bailouts for 450 VA and 900 VA customers (subsidies) was only around Rp3.4 per month. This amount is far less than the total budget that must be spent to help the middle class.

Moreover, said Zulkifli, for the incentives provided to 450 VA and 900 VA users, it was clear and PLN could not leave these names.

"The list of names of those who receive subsidies is a standard list. So it cannot be out of the list. This list is from the Ministry of Social Affairs, which is surveyed at least every 6 months with PLN to the field," he explained.

Decrease in PLN Revenue

Zulkifli also said that PLN had decreased revenue due to COVID-19. He said, a 1 percent decrease in electricity demand would have an impact on PLN's revenue which would decrease by IDR 2.8 trillion.

"We'll see if the fact is that the decline is 10 percent, it will impact PLN's revenue by Rp.28 trillion. Because a 1 percent decrease is the same as a decrease of Rp. 2.8 trillion," he said.

According to Zulkifli, sales in the Company's Work Plan and Budget (RKAP) are targeted at IDR256.7 trillion. With the assumption of a 9.7 percent reduction in electricity demand submitted to shareholders, the company's sales will decrease by IDR 35 trillion or become IDR 21.5 trillion.

"That's what happened due to the decline in our sales. Regarding operating income, it is different because operating income is combined with subsidies," he said.

Then, Zulkifli detailed the impact of the reduction in electricity usage due to COVID-19 by region. He said that, in total, the decrease in electricity load in Java could reach minus 10 percent. However, the impact of COVID-19 that occurred on Java Island was different from what happened in Sumatra, Sulawesi, Kalimantan and Bali.

Furthermore, Zulkifli said, the difference was influenced by several factors, namely, whether the region had industrial areas that stopped operating due to COVID-19 or not, how much economic activity had stopped in the area, and how many shopping centers, offices and other commercials.

According to Zulkifli, Java Island is the largest industrial and economic area where of course the impact of the decline due to COVID-19 is very significant. One of them is the West Java region which has the largest economic area and is also the epicenter of the COVID-19 pandemic. Thus, all economic activities are constrained.

Meanwhile, said Zulkifli, on the islands of Sumatra, Kalimantan and Sulawesi, the economy relies on natural resources. So that the decrease is not significant compared to Java Island. Then, for Sumatra Island, infrastructure development still contributes significantly to electricity use. So that the impact of the decline is not as big as in Java.

Then, continued Zulkifli, Bali Island also experienced a very large reduction in electricity consumption compared to other regions. The number even reached 50 percent. According to him, this is because the island of Bali focuses on tourism. However, due to COVID-19, the demand for foreign tourists and domestic tourists has decreased dramatically. In fact, hotels on this island are also not operating.

"The highest decrease in electricity is in Bali, hotels are not operating, guests have dropped dramatically," he explained.

Not only that, Zulkifli revealed, the electricity demand from Java-Bali in the last few weeks also continued to experience a decline in demand. The decline in the Java-Bali system in the second week of April this year amounted to minus 9.55 percent from the same period last year.

"For the energy system in West Kalimantan in the second week of April, it decreased by 1.81 GWh (Giga Watt Hour) or 3.97 percent from the same period in 2009," he explained.

Zulkifli said the decline in the electricity system in West Kalimantan had only occurred in the second week of April. Meanwhile, at the end of March to early April, the Kalimantan electricity system experienced an increase of 5.82 percent or 2.53 GWh.

The decline, continued Zulkifli, also occurred in the southern part of Sulawesi, where it decreased in the second week of April by 3.16 percent from the same period last year. Meanwhile, in the South, Central and East Kalimantan regions, interconnection demand also experienced a decline in demand on the second Sunday of April where there was an increase of 2.29 percent or 3.49 GWh from the same period last year.

However, Zulkifli said, although there was no minus of growth, the trend of the electricity system in this region showed a downward trend in growth from the second week of March where the increase in electricity use was 18.23 percent or 26.12 GWh.

The system for the northern part of Sulawesi, continued Zulkifli, did not experience a negative growth despite the decline in growth from March 9 to April 11 this year. On the second Sunday of March, the North Sulawesi system experienced a growth of 8.14 percent. Then it decreased to only grow 0.61 percent in the second week of April when compared to the same period last year.

Based on data from PLN, minus growth also occurred in Sumatra's electricity system where in the second week of April it fell by 2.08 percent from the same period last year. In fact, said Zulkifli, in the first week of April, there was still an increase in growth of 4.87 percent from the same period last year.

Meanwhile, said Zulkifli, the electricity system in the East Nusa Tenggara region has also experienced a downward trend in demand since early March this year. The second Sunday of March saw a 21.5 percent increase from the same period last year. However, its growth decreased on the second Sunday of April which was only 0.9 percent from the same period last year.