PLN Says - Free Electricity for Poor People

Director of PLN mentioned this idea to provide free electricity for poor consumers. Poor consumers according to his definition are those who have 450 VA connections. According to his calculation, PLN will only lost IDR 1.5 trillion if electricity is free for poor consumers. His argues that if the new tariff is applied PLN will profit IDR 20 trillion from richer consumers. If tariff is applied and no exceptions are made PLN will profit roughly IDR 40 trillion. 

Opinions are divided into two groups. Those that are supporting the idea say that all other state owned companies should also do that as social obligation. Those who against the idea say that such thing will only create complex conditions, opening more holes for corruption, making PLN suffers from lost (despite calculation above) and many other reasons.

I am actually on the "against" side. My reasons are:

• Free electricity is against energy conservation. Everyone has to be aware that it is the time to conserve energy and free things will just make people taking it for granted. This is not educative
• Free electricity might create "electricity theft" condition especially in dense urban area where checking electricity meter is sometimes impossible. This will eventually give burden to PLN financial condition and government's financial condition that might lead to economic crisis due to too much government spending
• There is no such free things. There is no free electricity because even people using solar power or wind power still have to invest for the equipment. Free things tend to make people being irresponsible
• It is important to alleviate poverty so making people responsible for their lives is an important part of the process and at the same time there are actions to give them opportunities to be well off. Government should not make poverty worse by giving consumptive subsidy. Subsidies should be carefully planned to activities that can make poor people have more income. I believe the strategy to provide fishing rod and good fishing pond rather than the strategy to give people the fish directly.

Anyway, this idea is still just an idea. The director of PLN was actually a bit irritated by parliament members who are not able to comprehend the complexity of the sector. The Parliament is not supporting this idea and also the ministry of energy. The increase of base electricity tariff will be nation wide and for everybody, no exceptions. It is expected that in Jul7 2010, the base electricity tariff will be increased. It is a good momentum for SBY government since he does not have to be reelected in 2014. The Impact? More energy efficiency project off course... :)