CHAPTER 11 MANAGEMENTopen_jicareport.jica.go.jp/pdf/11737046_18.pdf · management of the Masanda Management Unit, any member(s) can report, ask or apply to the Chairperson or the

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Manual for Micro-hydro power Development Chapter 11

Study on Rural Energy Supply with Utilization of Renewable Energy in Rural Areas in the Republic of Indonesia

CHAPTER 11 MANAGEMENT First of all, the following items need to be clarified for smooth performance of managing the electricity supply from the Micro-hydro Power Plant;

(1) Organization: An organization for management should be established first. (2) Management system: A management system should be made clear. The

management system includes duties of each person in charge assigned in the said organization, the communication system among the persons in charge, and the decision-making system of the organization such as voting on questions to be solved,

(3) Accounting system: An accounting system should be developed including a tariff system, collection of electricity charge according to the tariff system, book keeping, cash management method, and

(4) Rules and Regulations: Each of the above items should be put in the statutory form as a regulation and/or a rule, and all the persons in charge and the members of the organization should conform to the regulations.

11.1 Organization The organization for management of electricity supply from the micro-hydro power plant is called “the Masanda Management Unit” in this case. Recommended structure of the Masanda Management Unit is as shown in the following figure:

Fig, 11.1.1 Recommended Structure of Masanda Management Unit

Reserve Assistant Memebers

Chair Person(Head of Management Unit)

Vice Chair Person(Acting Head of Management Unit)

Secretary

Assistant Secretary

Accountant

Operators

Advisors

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11.2 Management System

11.2.1 Duties of Persons in Charge Chairperson: Chairperson is the head of the Masanda Management Unit. His/Her duties are:

(1) Comprehensive management of generation facilities and users whether they are using electricity according to the rules and/or the regulations.

(2) Necessary action as Chairperson. The Chairperson has responsibility to pay wages for full-time working persons such as the accountants and/or operators, and other necessary payments such as procurement of spare-parts for operation and maintenance, and so on. The Chairperson should also discuss with the Kabupaten’s person in charge of rural electrification on important matters such large amount of payment as to procure spare-parts, repairing the facilities, and/or replacement of a part of and/or overall facilities after taking agreement of all the members of the Masanda Management Unit.

(3) Calling of meetings of the Masanda Management Unit if necessary, and chairing of the meetings. Important matters such as the said large amount of payment must not be decided by the Chairperson’s own discretion, but should be decided by agreement of all the members of the Masanda Management Unit.

(4) Periodical report on cash management and status of facilities to the Kabupaten’s person in charge of rural electrification.

(5) The Chairperson should ask advice of the Advisors if necessary concerning of the above.

Advisors: Advisors may consist of several persons, and their duties are:

(1) Giving appropriate advice to the Chairperson of the Masanda Management Unit when requested by the Chairperson.

(2) In any time, they can investigate the status of the overall management, status of use of electricity by users, facilities’ status of the Micro-hydro Power Plant itself, and other necessary matters, if they judge it necessary.

(3) Periodical report on the overall management and facilities’ status of the Micro-hydro Power Plant itself to the Kabupaten’s person in charge of rural electrification.

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Vice-Chairperson: The Vice-Chairperson is the Acting Chairperson of the Masanda Management Unit. His duties are:

(1) Assisting works on the comprehensive management of generation facilities and users whether they are using electricity according to the rules and/or the regulations for the Chairperson, or making it on behalf of the Chairperson when the Chairperson is absent.

(2) Assisting works on the necessary action for the Chairperson, or implementing them on behalf of the Chairperson when he/she is absent. Therefore, the Acting Chairperson may also have a responsibility to pay wages for full-time working persons such as the accountants and/or operators, and other necessary payments such as procurement of spare-parts for operation and maintenance, and so on when the Chairperson is absent. Furthermore, the Acting Chairperson should also discuss with the Kabupaten’s person in charge of rural electrification on important matters such as large payments for procuring spare-parts, repairing the facilities, and/or replacement of a part of and/or overall facilities on behalf of the Chairperson or together with the Chairperson after taking agreement of all the members of the Masanda Management Unit.

(3) Assisting works on the calling of meeting of the Masanda Management Unit if necessary, and chairing for the meeting on behalf of the Chairperson.

(4) Periodical report on cash management and status of facilities to the Kabupaten’s person in charge of rural electrification on behalf of the Chairperson.

(5) The Acting Chairperson may also ask advice from the Advisors if necessary concerning the above on behalf of the Chairperson when the Chairperson is absent.

Secretary: On the smooth performance of the Masanda Management Unit, several secretarial work activities may be needed. Duties of the Secretary are as follows:

(1) Preparation of documents such as minutes of meetings when the Masanda Management Unit holds meetings, together with attendants lists and so on under the control of the Chairperson and/or the Acting Chairperson.

(2) Making contact with persons in charge in and out of the Masanda Management Unit and/or other parties concerned such as contractor(s) and/or trader(s) concerned when necessary under the control of the Chairperson and/or the Acting Chairperson, and making communication needed, and report to the Chairperson and/or the Acting Chairperson.

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(3) Preparatory works for the meeting of the Masanda Management Unit. (4) Other works concerning the management under the control of the Chairperson

and/or the Acting Chairperson.

Accountant: Duties of the Accountant are: (1) Collection of electricity charge based on the tariff system and bookkeeping.

The electricity charge may be collected by people coming to the Accountant periodically to pay their electricity charges. The Accountant enters up their payments with their names in an account book and keeps it carefully.

(2) Cash management. Cash as a revenue due to collection of electricity charges should be managed by the Accountant carefully. To use the banking system is one of the ways.

(3) Paying out cash needed as wages to persons who are engaged in full-time work such as operators and/or accountants and for other intended uses such as procuring spare-parts under the control of the Chairperson of Masanda Management Unit.

(4) If the amount of cash needed to pay out is too big, and it can-not be paid out from the existing cash balance, the Accountant should report to the Chairperson of the Masanda Management Unit, and discuss with him on the financing method.

(5) Periodical report on cash management to the Chairperson of the Masanda Management Unit.

Operator(s): At least, 2 operators may be needed. Duties of the Operator(s) are:

(1) Daily operation of micro-hydro power facilities. (2) Periodical check of all the facilities. (3) Uncomplicated maintenance for the facilities. (4) Judging required maintenance with cost to procure necessary spare-parts and/or

tools needed for maintenance. (5) Reporting of required maintenance with cost of procuring necessary spare-parts

and/or tools for maintenance to the Chairperson of the Masanda Management Unit, or to the Acting Chairperson when the Chairperson is absent.

(6) Periodical report on operation and maintenance of the facilities to the Chairperson of the Masanda Management Unit or to the Acting Chairperson when the Chairperson is absent with his ideas and/or opinions.

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Reserve Assistant Members: It is recommended that several reserve assistant members be assigned. The Reserve Assistant Members are for assisting works in case that a certain numbers of personnel or members are needed to execute some works, events or activities of the Masanda Management Unit such as preparing and setting up the meetings and so on to.

11.2.2 Line of Communication

For smooth performance of the Masanda Management Unit, a suitable communication system should be established. The communication system includes: a) an announcement from the Chairperson of the Masanda Management Unit, b) a report from the member(s) of the Masanda Management Unit, and c) a draft proposal on a plan from the member(s) by circulating for obtaining sanction of the Masanda Management Unit, etc. (1) Announcement

The announcement, for example, on meeting of the Masanda Management Unit from the Chairperson and/or the Acting Chairperson to the members is made through the Secretary or the Assistant Secretary who is ordered by the Chairperson and/or the Acting Chairperson.

(2) Reports Operator(s) should periodically report to the Chairperson or the Acting Chairperson of the Masanda Management Unit on the status of the micro-hydro power facilities. i) Accountant should periodically report to the Chairperson or the Acting

Chairperson on the status of cash management, especially the existing cash balance.

ii) The information of the above i) and ii) should be reported at the meeting of the Masanda Management Unit or in writing by the Chairperson or the Acting Chairperson.

(3) Circulation i) If some member(s) has (have) some plans for the management

concerning the electricity supply from the micro-hydro power plant, he, she or they can apply to the Chairperson or the Acting Chairperson directly in writing or orally. In this case, any subjects should be accepted if those pertain to the management of the Masanda

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Management Unit. ii) Upon request by the member(s) mentioned above i), the Chairperson or

the Acting Chairperson should call the meeting of the Masanda Management Unit to discuss matters.

iii) If there is no time to hold the said meeting mentioned above ii), the matters should be circulated in writing by the Chairperson or the Acting Chairperson for obtaining sanctions and/or agreement of the all the members concerned in the Masanda Management Unit.

(4) Urgent Information If something happens concerning the micro-hydro power facilities or the management of the Masanda Management Unit, any member(s) can report, ask or apply to the Chairperson or the Acting Chairperson, and the same method mentioned above (3) can be applied if needed.

11.2.3 Decision-Making System

The Meeting of the Masanda Management Unit is the supreme decision-making organ of the Masanda Management Unit. The Meeting is held by the following procedure:

(1) The Chairperson or the Acting Chairperson calls the Meeting of the Masanda Management Unit, if something happened to be discussed with all the members of the Masanda Management Unit.

(2) Important matters such as the above mentioned large amount payments must not be decided by the Chairperson’s or the Acting Chairperson’s own discretion, but should be decided by agreement of all the members of the Masanda Management Unit at the Meeting.

(3) The announcement on Meeting of the Masanda Management Unit to the members is made through the Secretary or the Assistant Secretary who is asked by the Chairperson and/or the Acting Chairperson.

(4) When the Meeting held, the minutes of meeting should be prepared at least in 2 copies. The Minutes of Meeting come into force by signing of the members concerned.

(5) The Chairperson or the Acting Chairperson should keep the original, and the Secretary should keep duplicated copy for public reading.

(6) Any members may peruse the Minutes of Meeting with the Secretary.

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11.3 Accounting System Accounting System consists of;

(1) Tariff System, (2) Electricity Charge Collection System, (3) Expenditures (4) Procedures on Pay Out, (5) Book Keeping Method, and (6) Cash Management System.

11.3.1 Tariff System (1) Methodology of Tariff Setting General For realizing the financially sustainable management system, it should be realized by own financing resources because there are no aid donors forever. From this viewpoint, the greatest consideration is needed to develop a suitable tariff system taking affordability of people to pay into account. For suitable tariff setting, the following steps are needed. Step 1:Affordability of People to Pay Suitable electricity charges should be within the affordability of people to pay. And, the suitable tariff system should be based on this affordability to pay. For analyzing the affordability of people to pay, it is necessary to make clear the economic status of households. And economic status of households can be clarified by means of itemized direct interview survey. In the direct interview survey, the following items may be needed as an example:

i) Average Household Expenditure consisting of: • Expenditure on food (such as rice and other foodstuffs including vegetables and

cooking oil, etc.) • Expenditure on non-food (such as alternative energy sources like kerosene with

necessary appliances such as kerosene lamps or other alternative energy sources for lighting, taxes, education, average expenses for transportation including schooling for children, expenses for medical care including infection and

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medicine, purchasing costs for farming equipment and/or appliances as sickle/harrow/scoop/crowbar and others depending on life-style or occupation, housing expenditure including improvement cost of house, and so on)

ii) Average Household Income: Item by item depending on life style or occupation.

When two household members are working to get income, total amount of income should be clarified.

Among the above items for expenditures, the expenditures for kerosene and kerosene lamps or other alternative energy for lighting are the most important items. This amount of expenditure can be taken for the upper limit of the willingness of people to pay for energy. Step 2:Clarification of the Total Cost Needed For establishing a suitable tariff system, the needed cost should be made clear. Necessary cost is generally divided into 2 categories: (1) initial investment cost and (2) cost for operation and maintenance. The initial investment cost consists of for the following:

i) Direct cost: • Preparatory works, • Civil works, including intake facilities, headrace, forebay tank, spillway channel,

penstock and foundation, powerhouse base, and finishing in case of hydro power facilities,

• Mechanical and electrical works including turbine, electrical load control, ballast housing, generator, protector, set-up and installation, transportation and finishing, and spare-parts in case of hydro power facilities,

• Transmission and/or distribution, • Consumer connection(house connection), and • Others

ii) Indirect cost: • Design fee, • Supervision fee, • Management fee, and • Tax.

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The cost for operation and maintenance consists of costs for:

i) Operation and maintenance including wages for full-time workers like operator(s), accountant(s) and so on, and spare-parts, and

ii) Replacement of a part of or overall facilities. Step 3:Verification of Affordability of People to Pay for Annualized Initial Investment Cost The explanation is given by means of an example in case of the micro-hydro power facilities with the initial investment needed as shown in the following table.

Table 11.3.1 An Example of Cost Estimates for Initial Investment Work items Amount (Rp)

1. Direct Cost (1) Preparatory Works (10 % of (2) through (6)) (2) Civil Works - Intake - Settling Basin - Headrace - Forebay Tank - Penstock Civil - Penstock Pipe - Power House Base - Power House Building (3) Electro-Mechanical Works (4) Distribution Works (5) Consumer Connection (House Connection) (6) Others (5 % of (2) through (5)) Sub-total (A)

2. Indirect Cost (1) Design Fee (5 % of (A)) (2) Supervision Fee (5 % of (A)) (3) Management Fee (10 % of (A)) Sub-total (B)

(4) Tax (12.5 % of (A)+(B)) Sub-total of Indirect Cost

Total Construction Cost If the initial investment cost is granted from some donors, it is no necessary to pay back any principal and interest. However, when the initial investment cost is financed by some loans, the principal and interest should be paid back to the donors. In case of the following conditions such as:

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i) Annual interest rate: ii) Repayment period:

iii) Number of customers:

iv) Year for financing

23 % as an existing lending interest in Indonesia 10 years without the grace period as existing loan terms in Indonesia 300 households The year 2003. Therefore, repayment will commence

The annual payback amount can be calculated as shown in the following table for the sample case mentioned above. Table 11.3.2 Example 1: Calculation of Monthly Payment per Household to Be Allotted to Initial

Investment Cost in Case of Loan with 10 Years of Repayment Period

Annual Interest Rate: 23.0 % Number of Households: 300 (HH)

Expenditure of Electricity Users Association in Rural

Area (Rp.)

Repayment

Year in

order Year

Initial Investment Cost

(Rp.)

Remaining Amount to Be Pay Back

(Rp.)

Principal Interest

Annual Average Expenditure of

Management Unit or Village

(Rp./annum)

Expenditure per Household for the Initial Investment

Cost (Rp./HH per month)

(1) (2) (3) (4) (5) (6) (7) (8) -1 1 2 3 4 5 6 7 8 9 10 11

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

2,138,351,400

1,924,516,260 1,710681,120 1496,845,980

1,283,010,840 1,069,175,700

855,340,560 641,505,420 427,670,280 213,835,140

0

0 0

213,835,140 213,835,140 213,835,140 213,835,140 213,835,140 213,835,140 213,835,140 213,835,140 213,835,140 213,835,140

0 0

491,820,822 442,638,740 393,456,658 344,274,575 295,092,493 245,910,411196,728,329 147,546,247

98,364,164 49,182,082

0 0

705,655,962 656,473,880 607,291,798 558,109,715 508,927633

459,745,551 410,563,469 361,381,387 312,199,304 263,017,222

196,010 182,354 168,692 155,030 141,369 127,707 114,045 100,384 86,722 73,060

Annual Average Expenditure: 484,336,592 134,538 Rounded at: 484,340,000 134,500

As shown in the table, the payment amount for electricity to be allotted to the initial investment cost will be Rp. 196,000 per month per household (HH). Even in annual average, the amount to be paid back is Rp. 134,500/ month per HH. How about the payback amount in case of 15 years for repayment period? The following table shows the result.

(8) = (7)/12/300

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Table 11.3.3 Example 2: Calculation of Monthly Payment per Household to Be Allotted to Initial

Investment Cost in Case of Loan with 15 Years of Repayment Period

Annual Interest Rate: 23.0 % Base Case Number of Households: 300 (HH)

Expenditure of Electricity Users Association in Rural

Area (Rp.)

Repayment

Year in

order Year

Initial Investment Cost

(Rp.)

Remaining Amount to Be Pay Back

(Rp.)

Principal Interest

Annual Average Expenditure of

Management Unit or Village

(Rp./annum)

Expenditure per Household for the Initial Investment

Cost (Rp./HH per month)

(1) (2) (3) (4) (5) (6) (7) (8) -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2,138,351,400

1,995,794,640 1,853,237,880 1,710,681,120 1,568,124,360 1,425,567,600 1,283,010,840 1,140,454,080

997,897,320 855,340,560 712,783,800 570,227,040 427,670,280 285,113,520 142,556,760

0

0 0

142,556,760 142,556,760 142,556,760 142,556,760 142,556,760 142,556,760 142,556,760 142,556,760 142,556,760 142,556,760 142,556,760 142,556,760 142,556,760 142,556,760 142,556,760

0 0

491,820,822 459,032,767 426,244,712 393,456,658 360,668,603 327,880,548 295,092,493 262,304,438 229,516,384 196,728,329 163,940,274 131,152,219

98,364,164 65,576,110 32,788,055

0 0

634,377,582 601,589,527 568,801,472 536,013,418 503,225,363 470,437,308 437,649,253 404,861,198 372,073,144 339,285,089 306,497,034 273,708,979 240,920,924 208,132,870 175,344,815

176,216 167,108 158,000 148,893 139,785 130,677 121,569 112,461 103,354 94,246 85,138 76,030 66,922 57,815 48,707

Annual Average Expenditure: 404,861,198 112,461 Rounded at: 404,860,000 112,500

As shown in the table, the annual average payback amount will be Rp.112,500/month per HH. Table 11.3.4 hereunder shows the result of trial calculation in changing the lending interest rate for reference together with the result of the said base case. Even in the most optimistic case under the conditions of a 15 years repayment period with 3 % lending interest, the average monthly pay back amount will still be Rp. 49,100/month HH. This amount should be compared with the amount of expenditures for alternative energy sources for at least lighting. Then it can be cleared whether or not the pay back amount is affordable for the people. Table 11.3.4 Example 3: Trial Calculation of Monthly Payment per Household to Be Allotted to

Initial Investment Cost in Case of Several Lending Interest (Rp./month.HH)

Annual Average Pay Back Amount (Rp./month.HH) in Case of Annual Lending Interest Rate of: Repayment

Period 23 % 12 % 9 % 6 % 3 % 10 Years 134,500 98,600 88,800 79,000 69,200 15 Years 112,500 77,600 68,100 58,600 49,100

(8) = (7)/12/300

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In addition to the said payback amount to be allotted to the initial investment cost, the people have to pay the costs for operating and maintenance for the power facilities. Step 4:Calculation of Monthly Payment of Costs for Operating/Maintenance and Replacement (OMR Cost) In this step also, the explanation is given by means of an example based on above given power facilities. The conditions of calculation for the monthly OMR cost are assumed at: OM Costs:

i) It is assumed that OM cost consists of wages for staffs and cost for spare-parts. ii) Number of full time staffs: 2 operators and one accountant. iii) The amount of wages: Rp. 200,000/month.person. iv) It is assumed that all the spare parts should be changed every 5 years. v) Price increasing rate: 5 % per annum.

The annual necessary OM cost comes to Rp. 8,770,000 as shown in the following table.

Table 11.3.5 Sample Calculation of Monthly OM Cost to Be Needed OM Cost

OM Cost and Replacement Cost Unit Wages for Full-Time Staffs* Spare-Parts Total

Total OM Cost and Replacement Cost During Life Time Rp. 7,200,000 6,800,000 14,000,000

Percentage to Be Needed to Cover % 100.00 % Price Increasing Rate % 5.00 % Life Time Year 5 Capital Recovery Factor 0.23097 Annualized Cost Rp. 7,200,000 1,570,629 8,770,629

*:Amount of wages to be needed:

Description Persons Unit wage (Rp./month)

Annual amount (Rp./annum)

Operator for generator (person): Treasurer/Accountant (person):

2 1

200,000 200,000

4,800,000 2,400,000

(Note)

Total 7,200,000

Replacement Cost: i) Percentage needed to cover the intake facilities: 20 % ii) Life time of the intake facilities: 10 years iii) Percentage needed to cover the M & E facilities: 70 % iv) Lifetime of the M & E facilities: 15 years. v) Percentage needed to cover the distribution facilities: 50 % vi) Lifetime of the distribution facilities: 30 years. vii) Price increasing rate for all the above facilities: 5 %

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The annual necessary OM cost comes to Rp. 32,398,000 as shown in the following table.

Table 11.3.6 Sample Calculation of Monthly Replacement Cost to Be Needed Replacement Cost

OM Cost and Replacement Cost Intake Facilities

Mechanical & Electrical Facilities Excluding Spare-Parts

Distribution Facilities Total

Total OM Cost and Replacement Cost During Life Time 48,394,950 343,740,000 244,822,000 636,956,950

Percentage to Be Needed to Cover 20.00 % 70.00 % 50.00 % Price Increasing Rate 5.00 % 5.00 % 5.00 % Life Time 10 15 30 Capital Recovery Factor 0.12950 0.09634 0.06505 Annualized Cost 1,253,473 23,181,689 7,963,011 32,398,173

In these cases, the capital recovery factors (CRF) in the tables are calculated by the following formula:

trr

−+−=

)1(1CRF

Here, r = Annual price increasing rate, and t = Life time (durable time, year) of spare-parts and/or facilities to be replaced. Therefore, the annualized cost can be calculated by: Annualized cost = total cost x % needed to cover or to be replaced × CRF As a result, the OMR cost comes to Rp.41,168,802 per annum (= Rp.8,770,629 + Rp.32,398,173). Accordingly the average monthly payment for the OMR cost will be at Rp.11,436/month. HH (= Rp.41,168,802/12 months/300 HHs). In the above case, it should be noted that wages are assumed to be the same for the decades without any rise. If the wages will be raised every year, the above sample calculation will be changed, and become higher than the above. On the other hand, the life times of each facility are the standard ones. If the facilities will be kept for a long time due to good operating and maintenance, the monthly payment for the OMR cost will become lower than the above. Also it is recommended that part of labor wages to be paid to villagers as participatory labor during the construction works of the power facilities be deposited as much as

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possible so that the monthly payment amount can be controlled. Step 5: Tariff Setting Tariff setting should be made taking following priority items into account; Priority 1: The electricity users should pay for at least the financial cost of the daily

operation and maintenance without any exceptions. Priority 2: If the electricity users have greater affordability to pay over the daily

operation and maintenance cost, then they would be required to additionally pay for unscheduled repairs.

Priority 3: If the electricity users have further capacity to pay beyond the costs for operation and maintenance plus unscheduled repairs, then they should be required to additionally pay for scheduled replacement cost.

Priority 4: If the electricity users have again further capacity to pay over all the above costs, then they should be required to pay for all or a part of the initial investment cost.

When a tariff setting is made, with the above-mentioned priority order in mind, it is necessary to carefully value the house connection fee as an advance payment, the electricity (or energy) tariff for households (or the most likely affordable rate of proportion against the most probable monthly income), and other possible levels of fees. A large amount of the house connection fee can effectively reduce the monthly payment for electricity. Therefore, the house connection fee should be set as much as possible within the affordability of people to pay. Nevertheless, even if the average monthly payment comes to the said amount of Rp.11,400/month.HH based on the needed OMR cost, when the affordability of people to pay can be expected at the sum of Rp.25,000/month.HH, the monthly electricity tariff for households should be set as much as possible within this amount of their affordability to pay, so that the difference can be allotted to the initial investment cost. The electricity users must be informed of all outputs yielded from the steps above. Any further promotion activities should be strictly subject to an agreement with the electricity users. In the event of disagreement, there should be a different scheme with a different energy resource.

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It is of quite high importance for electricity users not only to agree to the electricity tariff, but also to regulate how and when the electricity tariff is changed. The regulation should include a scheduled rise of monthly electricity payments to meet expected price escalation, or to meet scheduled changes of electricity tariff of PLN. (2) An Example of Tariff System The tariff system basically consists of (1) the advance payment (or the payment for the initial cost) and (2) the monthly electricity charge for ordinary households. In addition to this, some special cases and penalties should be made clear in writing. Table 11.3.7 shows an example tariff system. The said tariff system mentioned should be revised at the time of revision of PLN Electricity Tariff System with the same rate (percentage) of it. 11.3.2 Electricity Charge Collection System The electricity charge should be paid by customer(s) themselves directly to the Accountant. 11.3.3 Expenditures Expenditures consist of: (1) ordinary expenditures and (2) incidental expenditures. Ordinary expenditures mainly consist of: (i) overhead for the core of the Masanda Management Unit such as the Chairperson, the Acting Chairperson, the Secretary, the Assistant Secretary and Accountant, (ii) wages for the operator(s), and (iii) the reserve for the depreciation cost of micro-hydro power facilities. Incidental expenditures are categorized into (a) expenditures of small sums of money, and (b) expenditures of large amounts of money consisting of (i) the ordinary maintenance cost (in the category of small sums of money), (ii) the cost for the Meeting of the Masanda Management Unit and some others (in the category of small sums of money) and (iii) the expenditures for procurement and/or purchasing of the spare-parts or equipment/materials (in the category of large amounts of money). Table 11.3.8 shows an example expenditure limit. The Equipment Price List is shown in

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Attachment-7. Table 11.3.7 Example of Tariff System

Item Remarks Regular Payment

Advance payment (Payment for Initial cost)

Monthly electricity charge without television (TV) set

Monthly electricity charge with TV set

Monthly electricity charge with other electricity appliance(s)

Each customer should pay the advance payment at the same time of request to connect the electricity with his or her house at once.

Each customer who does not have a TV set should pay this amount of monthly electricity charge in advance to use during the period from 1st to 10th day of every month.

Each customer who has the TV set should pay this amount of Monthly Electricity Charge in advance to use during the period from 1st to 10th day in every month.

For customer(s) who a the other electric appliance(s), the regular monthly electricity charge should be discussed in the Meeting of the Management Unit, and the customer(s) should abide by the decision of the Meeting

Additional Payment Addition of electric bulb

Each customer who wants to add a electric bulb should pay this amount of the additional payment per bulb at the same time of request of installment of additional new bulb at once.

Penalties Charge in arrears of first 10 days delay to pay

Charge if arrears of second 10 days delay to pay

* Punishment

Reconnection charge

Each customer who paid the regular monthly electricity charge in 10 days delay from 11th to 20th day is charged this amount of fine in addition to the regular monthly electricity charge.

Each customer who paid the regular monthly electricity charge in 10 days delay from 21st to the end of the month is charged the amount of fine in addition to the regular monthly electricity charge.

When the customer(s) can not pay the regular monthly electricity charge within the month, the electricity connection is cut for that (those) customer(s) from the next month.

When the customer(s) who is punished and cut off the electricity connection want(s) to connect the electricity again, the customer(s) should pay this amount of reconnection charge in addition to regular monthly electricity charge of previous month and the charge in arrears of second 10 days delay to pay.

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Table 11.3.8 An Example of Expenditure Limit by Item Item Remarks Ordinary expenditures

Overhead of the core of the Management Unit Wages for operator(s) Reserve for depreciation cost

Per month. Per month per head. Per month. This amount is not actual expenditure, but should be kept as the reserve for depreciation of the micro-hydro power facilities

Incidental Expenditures Ordinary Maintenance Cost (the amount of upper limit)

Meeting fee (the amount of upper limit)

Other necessary expenditure (the amount of upper limit)

Per month. This amount should not be periodically paid out every month, but should be paid out when something needs to be bought for the ordinary maintenance within this amount of money as an expenditure of small sum of money.

Per month. When the Meeting and/or some parties are held, the expenditures may be paid out within this amount as the expenditure of small sum of money.

Per month. This amount should not be periodically paid out every month, but should be paid out when something needs to be paid out such as transportation cost and so on within this amount of money as an expenditure of small sum of money. When something needs to bought, the amount of expenditures should be discussed in the Meeting of the Management Unit. This expenditure is in the category of large amount of money.

For the expenditures indicated in the above table, followings should be taken into account.

(1) In the above table, the Overhead of the Core of the Masanda Management Unit should be allocated for the Chairperson, the Acting Chairperson, the Secretary, the Assistant Secretary and the Accountant before actual paying out discussing in the Meeting of the Masanda Management Unit.

(2) The overhead and the wages for the operator(s) should be revised periodically based on the annual consumer price index (CPI) reported in the Statistical Yearbook issued by the Central Statistic Bureau of the Republic of Indonesia. The revision should be discussed in the Meeting of the Masanda Management Unit.

(3) Furthermore, the incidental expenditures indicated in the above table may be revised based on the annual consumer price index (CPI) reported in the

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Statistical Yearbook issued by the Central Statistic Bureau of the Republic of Indonesia. The revision should be discussed in the Meeting of the Masanda Management Unit.

(4) In case that the Incidental Expenditure should pay out more than the amount indicated above table, the amount of expenditures should be discussed in the Meeting of the Masanda Management Unit. In this case, these expenditures are in the category of large amount of money.

(5) In addition to the above mentioned expenditures, some large amounts of expenditure will be needed in the future, for example, for procurement and/or purchasing the equipment/material for replacing the micro-hydro power facilities. In this case, the amount of expenditures should be discussed in the Meeting of the Masanda Management Unit. This expenditure is in the category of large amount of money.

11.3.4 Procedures on Paying Out Procedures on paying out the money consist of: (1) ordinary expenditure as wages, (2) paying out of small sum of money as meeting fees and/or transportation fees and so on, and (3) expenditures for procurement and/or purchasing goods as large amount of money as spare-parts and/or equipment/material for replacement for the micro-hydro power facilities. (1) Ordinary Expenditures

Except the Reserve for the Depreciation Cost, a payment slip should be issued for every payment as explained hereunder in sub-clause of 11.3.5 (Book Keeping Method). If almost the same form is available in stationery shops in town, it can be used too. In this case, the signatures of the Chairperson, the Accountant and the receiver must not be omitted. For the reserve for the depreciation cost, the Accountant should transfer a certain amount from the revenue column to the expenditure column of the cashbook periodically. The cashbook is explained hereunder in sub-clause of 11.3.5 (Book Keeping Method).

(2) Paying Out of Small Sums of Money For paying out of small sums of money, the said payment slip should be issued for every payment in the as same manner as paying out the ordinary expenditures mentioned above. In this case too, if almost the same form is

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available in stationery shops in town, it can be used too, being careful not to omit the signatures of the Chairperson, the Accountant and the receiver.

(3) Procurement and/or Purchasing i) A request on procurement and/or purchasing of items such as spare-parts

and/or equipment’s/material for replacement for micro-hydro power facilities is made by the Operators to the Chairperson or the Acting Chairperson.

ii) On the request of Operator(s), the Chairperson or the Acting Chairperson asks the Secretary and/or the Assistant Secretary to contact the parties concerned (for example, trader(s)) whether there is any stock of such spare-parts and/or equipment’s/material, and make the Secretary and/or the Assistant Secretary ask them to draw up an estimate for such goods.

iii) At the same time, the Chairperson or the Acting Chairperson should check cash balance by consulting the Accountant.

iv) If the estimated amount for such goods is huge, the Chairperson or the Acting Chairperson should call the meeting of the Masanda Management Unit, and bring the matter up at the meeting to obtain agreement of all the members of the Masanda Management Unit.

v) If the estimated amount is larger than the amount of existing cash balance, the Chairperson or the Acting Chairperson should come to the persons in charge of rural electrification in the Kabupaten, and discuss ways of working out remedial measures.

vi) If the estimated amount is within the existing cash balance after deducting the ordinary expenditures as wages and some other expenditure as transportation fees, etc., the Chairperson or the Acting Chairperson can place an order with the trader(s) to deliver of such goods through the Secretary and/or the Assistant Secretary.

vii) Then, the Chairperson or the Acting Chairperson asks the Accountant to prepare the cash needed or to prepare to transfer the amount of money needed to the account of such trader(s), and to pay out after receiving the bill from the trader(s).

viii) After paying out, the receipt(s) should be received from the trader(s), and kept by the Accountant.

11.3.5 Book Keeping Method

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Several account books should be prepared before commencement of the management of the Masanda Management Unit. The account books consist of (1) Electricity Charge Collection Ledger, (2) Receipts Pad, (3) Paying-In Slip, (4) Payment Slip, (5) Cashbook, and (6) Journal.

(1) Electricity Charge Collection Ledger

The form of the Electricity Charge Collection Ledger is as shown in Attachment-1. The Accountant should enter (i) the date of payment, (ii) the address of the payer (Kampung and Lembang), and (iii) the amount of payment in the proper columns when a customer comes with cash to the Accountant to pay.

(2) Receipts Pad

The form of the Receipts Pad is as shown in Attachment-2. This Receipts Pad is given to the customers ahead of time. When the customers want to come to the Accountant to pay their Regular Payment, they should bring it with the cash. After the Accountant receives the payment, the Accountant should enter the necessary items as mentioned above and enter (i) the amount of payment, (ii) date of payment and (iii) signature in the proper column of the Receipts Pad. The customers should keep their Receipts Pad carefully because it is the evidence of their payment.

(3) Paying-In Slip The form of the Paying-In Slip is as shown in Attachment-3. The Paying-In Slips should always be kept at the Accountant. When some members come to the Accountant to pay some additional payment such as installing for the new electric bulb, the Accountant should enter (i) the date of payment, (ii) description of payment, and (iii) the amount of pay. And, signatures of the Chairperson, the Accountant, and the payer should be taken on this Payment Slip.

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(4) Payment Slip The form of the Payment Slip is as shown in Attachment-4. The Payment Slips should always be kept at the Accountant. When some members come to the Accountant to receive some amount of money such as the wages and/or some expenditure in small sum of money, the Accountant should enter (i) the date of paying out, (ii) description or purposes of payment, and (iii) the amount of paying out. And, signatures of the Chairperson, the Accountant, and the receiver should be taken on this Payment Slip. After all the needed items have been entered on proper columns on the Payment Slip, the Accountant can pay out the requested amount of money in cash. The person who receives the money in cash should bring back receipts after completion of payment to the final recipient except the wages of full time workers like the operator(s) and/or the amount paid out for the overhead for the core of the Masanda Management Unit. Nevertheless, no receipts are needed of the payment of wages of full time workers like the operator(s) and/or the amount paid out for the overhead for the core of the Masanda Management Unit.

(5) Cashbook The form of the Cashbook is as shown in Attachment-5. The Accountant should enter: a) Revenue based on the Electricity Charge Collection Ledger and the

Paying-In Slip, and b) Expenditure based on the Payment Slip with (i) the date of paying-in and/or -out, (ii) description and/or purposes of paying-in and/or -out, (iii) the amount of paying-in and/or -out, and (iv) the cash balance in the proper column of the Cashbook.

(6) Journals The forms of the Journals are as shown in Attachment-6. At least, 3 types of journal may be needed such as (i) the Journal for the Advance Payment, (ii) the Journal for the Regular Monthly Electricity Charges, and (iii) the Journal for

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the Reserve of the Depreciation Cost. The Accountant should enter needed items in proper columns of each Journal as shown in Attachment-6 based on the Cashbook just after the paying-in and/or -out occur.

11.3.6 Cash Management System All the revenues due to collection of (i) the advance payment, (ii) the regular monthly electricity charges, (iii) the additional payment, (iv) the money in arrears, and (v) the reconnection charge are managed by the Accountant under the control of the Chairperson of the Masanda Management Unit. All the money collected should be deposited in a banking system taking the following matters into account:

(1) The KSP Baro Toraja (= Koperasi Simpan Pinjam Baro Toraja, namely “the Baro Toraja Debit-Credit Cooperative”. Hereinafter referred to as “the Bank”) located in a local town of Bittuang is recommended as a banking system.

(2) The Bank account is to be specified to open in the name of “Masanda MHPP (= the Masanda Micro-Hydro Power Project)” and is authorized by the names of the Chairperson, the Secretary and the Accountant.

(3) Withdrawal from the Bank account should be made by the names of at least 2 persons of the above 3 persons with their original signatures.

(4) The balance at the Bank should be kept at the same amount of cumulative amount of the advance payment received and the cumulative amount of the reserve for the depreciation cost transferred. It means that the advance payment and the reserve for the depreciation cost cannot be used for the ordinary expenditures except for the proper purposes. From this viewpoint, the Accountant should always check the balance of the Bank through the book keeping works. In this case, (i) The revenue due to collection of the advancement payment may be

used for electricity distribution facilities within 50 % at maximum, and for in-house installation within remaining 50 % at maximum.

(ii) The balance of reserve for depreciation cost transferred may be appropriated for renewal of the micro-hydro power facilities in the future.

(5) The cumulative remaining balance of the deposited cash in the Bank should be kept for the future as a revolving fund.

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11.4 Regulations

Based on the above, regulations should be established before commencement of management of the

Masanda Management Unit.

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Attachment- 1 Electricity Charge Collection Ledger

El

ectri

city

Cha

rge

Col

lect

ion

Ledg

er

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Attachment- 2 Receipts Pad

(A) Cover Sheet of Receipts Pad

Name of Family Head:

Name Kampung/Lembang

Television Set: No

Other Electricity Appliance(s): (Description)

(B) Form of Receipt Pad

Date of Payment

Dec. 25, 2002

Y. Toding Jan. 1, 2003

Y. Toding

Item of Payment

Advance Payment

Signature bythe Accountant

100,000

AmountPayment for:

Commencement ofElectricity Supply

January 11,000

November

December

2003

June

July

August

September

February

March

April

Receipts Pad for the Payment of Electricity Charge

Yes

Kampung Salupuan, Lembang Belau

October

May

Regular Monthly Electricity Charge for themonth of:

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Attachment- 3 Paying-In Slip

Date of Payment

Amount

Signature of the Head:Signature of the Accountant:Signature of the Receiver:

Paying-In Slip

Description of Paying-in

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Attachment- 4 Payment Slip

Date of Payment

Amount

Signature of the Head:Signature of the Accountant:Signature of the Receiver:

Description of Payment

Payment Slip

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Attachment- 5 Cash Book

Dec.31, 2002 Advance Payment in Dec., 2002 (157 KK) 15,700,000 15,700,000Jan. 31, 2003 Regular Monthly Electricity Charge for January, 2003 1,727,000 17,427,000

Cash Book

Date Items of Revenue and/or Expenditure Amount ofRevenue

Amount ofExpenditure Balance

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Attachment- 6 Journal

Advance Payment

Dec.31, 2002 December., 2002 (157 KK) 15,700,000 15,700,000

Regular Monthly Electricity Charge

Jan. 31, 2003 Regular Monthly Electricity Charge for January, 2003 1,727,000 1,727,000Jan. 31, 2003 Wages for Operators 500,000 1,227,000Jan. 31, 2003 Overhead for the Core of the Management Unit 350,000 877,000Jan. 31, 2003 Reserve for Depreciation Cost for January, 2003 500,000 377,000

Reserve for Depreciation Cost

Jan. 31, 2003 January 2003 from the Regular Monthly Electricity Charge 500,000 500,000

Journal



Balance




Amount ofExpenditure

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Attachment- 7 Equipment Price List

Equipment Price List for Masanda MHP

No Equipment Unit Quantity Life Time (Year)

Unit Price (Rp)

I CIVIL WORKS a Flushing Gate (60w x 210h) cm2 unit 2.0 10 2,035,000 b Screen 1 (Intake) m2 3.7 10 534,000 c Screen 2 (Forebay Tank) m2 3.0 10 640,800 d Welded steel q 58 cm m1 39.7 15 1,210,000 e Butterfly valve q 50 cm unit 1.0 20 35,000,000 f Rubber for butterfly valve unit 1.0 10 500,000 g Reducer pipe 580 mm to 500 mm unit 1.0 15 2,500,000 II MECHANICAL & ELECTRICAL a Turbine T13 bo. 630 mm unit 1.0 15 167,600,000 b Pulley of turbine unit 1.0 20 4,500,000 c Flexible Coupling unit 2.0 15 2,500,000 d Rubber Coupling unit 2.0 2 237,600 e Plummer Block Bearing Set unit 4.0 10 1,800,000 f Flat belt unit 1.0 5 3,750,000 g Fence Guard unit 1.0 20 2,000,000 h Adapter pipe unit 1.0 20 3,000,000 I Pressure gauge unit 1.0 1 420,000 j Electronic Load Controller unit 1.0 5 45,000,000 k Air Heater 54 kW unit 1.0 5 27,500,000 l Syncronous Generator Stamford unit 1.0 10 60,000,000 m Generator base frame unit 1.0 20 2,500,000 II MECHANICAL & ELECTRICAL a Transmission pole pcs 142.0 20 910,000 b Twisted Cable 4 * 70 mm2 m1 1,040.0 20 28,500 c Twisted Cable 4 * 35 mm2 m1 2,210.0 20 22,500 d Twisted Cable 2 * 16 mm2 m1 1,780.0 20 12,500

Documents

CHAPTER 11 MANAGEMENTopen_jicareport.jica.go.jp/pdf/11737046_18.pdf · management of the Masanda Management Unit, any member(s) can report, ask or apply to the Chairperson or the