The energy risk reserves are important for state electricity company PT Perusahaan Listrik Negara (PLN) to support the already approved electricity subsidy of Rp64.97 trillion, Director General of Electricity at the Energy and Mineral Resources Ministry Jarman said here on Monday.
With the electricity subsidy set at Rp64.97 trillion, a number of risks could take place. One of them is that PLN will not be able to meet the electrical power needs that are projected to increase by 9 percent, he said.
"This means that (PLN) will not be able to connect electricity to 2.5 million new subscribers as originally planned," he noted.
The other risk is that the reduction of maintenance costs and fuel oil consumption may lead to power blackouts in a number of areas that still use diesel-fueled power generators.
He added that the limited electricity subsidy will also cause PLN`s debt service coverage ratio (DSCR) to reach 0.34 percent.
"The DCSR should reach a minimum of 1.5 percent. So the lower DCSR will make PLN default on its debts," he said.
At its recent meeting with Energy and Mineral Resources Minister Jero Wacik, the House of Representatives` Commission VII approved the amount of electricity subsidy under the draft revision of the 2012 state budget at Rp64.97 trillion.
The House is expected to approve the fiscal risk reserves at its plenary meeting on Tuesday.(*)
Editor: Heru Purwanto
Copyright © ANTARA 2012
