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NRECA FINAL REPORT
RURAL ELECTRIFICATION PROJECTS DEPARTMENT OF COOPERATIVES
CONTRACT AIDASIA-C-1357
AID LOAN NO 497-T-052 DECEMBER 1984
TABLE OF CONTENTS
INTRODUCTION
page 1 2Background
NRECA Team 3
Area Map 4
HISTORY
Project Development Office -
ProJect Funding 6 Rural Electric Cooperative Organization 7
Development
Management
Training 9-13 Rural Electrification Demonstration Projects 14-17
Electric) Power Supply 17-19
Construction 19-20
Business Operations 21-25
SUMMARYV
Lessons Learned 26-2 Recommendations 30-33 Financial ampOperating StatIstics 3
bull
INTRODUCTION
This report presents a history of the formation and development of
three RURAL ELECTRIC COOPERATIVES in Indonesia It covers events which
occurred from January 1979 the period when the cooperatives were orshy
ganized through December 1984 the United States Agency for Internashy
tional Development (USAID) Project Assistance Completion Date (PACD)
BACKGROUND
The Government of Indonesia (GOI) initiateda demonstration rural elecshy
trification program to provide areawide electric power distribution in
specified areas The objective of this program was to demonstrate conshy
clusively that reliable electric service and the social and economic
benefits that accrue therefrom can be made available to the very poor
people at a price they are able to pay
Three of the electrical power systems are located on separate islands
outside of Java and were implemented through rural electric cooperative
(REC) The three outer island systems are located on Central Lampung
South Sumatra (Sinar Siw Mego REC) East Lombok (Sinar Rinjani REC)
and Luwu SouthSulawesi (Samabotuna REC) and are being constructed and
developed by the member-consumers themselves through the rural electric
cooperative organizations Each cooperative owns and operates a diesel
generating plant to provide power for the electrical distribution
system and eachhas there own headquarters facilities A special
agency known as the Project Development Office (PDO) under the Departshy
ment of Cooperatives is the GOI implemening agency forthe cooperatives
2
USAID assisted the GOI in this demonstration including making available
AID grant funds to provide organizational management and technical
advisory services The National Rural Electric Cooperative Association
(NRECA) through its International Programs Division was contracted
by AID to provide these services The services for the Cooperatives
included complete assistance in the organization of the individual
cooperatives including staffing patterns job descriptions cost
accountingOampM methods training planning policies and procedures
housewiring and etc
USAID also made available grant funds for the services of anArchitecshy
tual and Eigineering-firm Chas T Main International Inc who was
responsible for commodity procurement headquarters and distribution
system design and construction (Information on these ativities are
included inChas T Mains final report dated December 1984)
3
The personnel which NRECA furnished for the performance of this contract are listed as follows
1 DENNIS WILSON Team Leader November 1978 -March -1980
2 PETER MCNEILL- Team Leader April 1980J-July i982
3 RAY SHOFF Team Leader August1982 -De 1
Administrative January- 1981 - July 1982 Officer
Training Officer January1979 - Sept 1980
4 LOUIESANSING Training Officer October 1980 - March 1984
July 1982
Lombok Project Advisor
February 1979 - Sept 1980
5 PAUL SWANSON Lombok Project Advisor
October 1980- July 1982
Luwu Project Advisor
March 1979 - Sept 1980
6 JOHN DEFOOR- Project October 1980 -Feb 1983 Advisor
7 LLOYD LAKE Lmpung Project Sept 1978 -July 1981 Advisor
8 CLAUDE FRANKE Lampung Project August 1981 -Advisor
91 WILLIAM GREG Administrative July 1979- Sept 1980 Officer
Intotal the NRECA team provided two hundred and seventy eight(278) person-months inOrganization-Management-Training Activities for the PDO and the three rural electic cooperatives
R UR AL E LEC T R IFI C ATIO N
C0OOP ER AT I VE P ROJ E CT SI TE S
edan
Su~uta~ adarig KALIMANTAN -
Palembang SULAWESI
LAM~PUNG
SINAR SIWO MEGO
Jaarta
Semarang Z AA Surabaya
Ujung Pandang LUWU VSAMABOTUNA
LMO TIMUR SINAR RINJANI
PROJECT DEVELOPMENT OFFICE FOR RURAL ELECTRIFICATION
I
As a condition precedent to release of US dollar loan funds a Project
Development Office for Rural Electrification (PDO-RE) was formed in
calendar year 1978 Originally the PDO-RE was directly under the office
of the Direptor General of Cooperatives but in 1983 when the GOI formed
a separate Ministry ofCooperatives PDb-REs reporting relationship
shifted to the Department of Cooperatives within this Ministry
With-assistance from NRECA the PDO-RE was organized and staffed for
three basic functions Organization of RECs and personnel training
budgeting andcontrol of loan funds for the RECs technical assistanrA
for engineering materialequipment procurement and construction
During the period 1978 to the end of 1984 USAIDs PACO personnel
complement varied from thirty (30) to sixty (60) persons and refinements
were made in-organizational structure
As with most new agencies time was required before thePDO-RE began
to function effectively The two major problems were minimal authority
in decision-making within the GOI framework and low salaries resulting
in a high personnel turnover
By USAIDs PACDI PDO-RE had developed key personnel in the accounting
and technical departments to provide continuing assistance to the RECs
Administrative functions within the PO-RE were performed efficiently
and requests for assistance in the development of additional rural
electrification projects were being processed
6
PROJECT FUNDING
Loan funds for the RECs were from two sources USAIDs commodity loan
and GOIs counterpart loan Originally the Canadian Government
through their international development agency approved a loan to fund
the power supply components of the project but this was not utilized
TheUSAID loan was in the amount of ten million dollars ($10000000)
divided between the three RECs Loan terms included two percent (2)
interest during theten year grace period-and three percent (3)
interest during the twenty year amortization period (30 year loan)
The GOI loan totalled the 1978 rupiah equivalent of $14402000 US
dollars which due to devaluation was only the equivalent of $5400000
US dollars at the time of the PACD Loan terms limited the grace
period to six years with a fourteen year amortization period (20 year
loan) The interest rate was set at six percent (6)
To identify and commit the end-user of these loan funds re-loan
agreements were executed between the GOI Bank Rakyat Indonesia (BRI)
and the three RECs PO0-RE and NRECA staff provided recommendations
on division of the loans between the three RECs using feasibilityshy
study projections as the basis for division Re-loan agreements
included the addition of six-tenths of one percent (6) service charge
for BRI raising the interest on the US dollar loan to 26 during
the grace period 36 during the amortization period and raising
interest on the GOI loan to 66
Both the USAID and GOI provided grant funds to develope the RECs
The USAID grant expenditures at the PACD were approximately six million
five hundred thousand $6500O00)dollars which was primarily for
architecture and engineering-consultants and organization-managementshy
training consultants
The GOI grant as stipulatedin the USAID-GOI loan was listed as the
rupiah equivalent of one million three hundred and fifteen thousand
($1315000)dollars forconsultant support Inaddition rupiah funds
were made available to svuport thePDO-RE andthe RECsfrom the GOIs
annual budget (DIP funds) At the PACD approximately Rp 4700000000
rupiah hadbeen expended for all purposes Thedollar equivalent
which is difficult to estimate due to drastic changes in rupiah-dollar
conversion rates may approximate $5700000
REC ORGANIZATIONAND DEVELOPMENT
ThePDORE and NRECA staff-assisted bylocal DGC staff conductea
information meetings in the three REC areas beginning inJanuary of
1979 This activity was followed by artual organization of eachREC
adoption of bylaws and election of directors By-April 1979 the
organizationphase of REC development had been completed
Temporary-offices were established within each REC area in 1979
lermanent headquarters facilities which included an office building
md a warehouse were completed and odcupied in 19831984
During the pre-construction period a small staff of about six people
was employed at each kEC When membership solicitation began and RE demonstration project construction started employee complement inshy
creased substantially
Listed below are statistics relating to the RECs servir areas and
organizationas of the PACD
KECAMATAN DESAS BOARD MEMBERS EMPLOYEES
Lampung 9 109 5 8i
Lombok 5 29 7 46
Luwu 5 51 9 76
MANAGEMENT
After organization a local DGC representative served as ProjectCoorshy
dinator and controller of GOI grant funds and also served as REC
Acting Manager Bythe end of 1980 PDO-RE had appointedan acting
manager for each REC from PDO-RE staff
Ironically at the PACD management was again by coordinator-manager
dual rolL at the Luwu REC and planswere being made to appoint the
Acting Manager as Coordinator at the Lombok REC As the RECs grow and
accept greater financial responsibilities with their own capital the
role of the Coordinator is diminishing Eventually as grant funding
is phased out the Coordinators position will be abolished and Managers
will be appointed on a permanent basis
9
TRAINING
The greatest activity for the NRECA OMT team was TRAINING -------shy
both formal class room training ---- and on-the-job training
Key employees of the PDO-RE first received training in the Philippines
with the Philippines National Electrification Administration (NEA)
Seven persons spent two weeks in the Philippines in 1978where NEA and
NRECA staff conducted training courses Later that year two key NEA
staff members came to Indonesia and assisted NRECA with first-stage
training for PDO-RE staff
The position of NRECA training officer in Indonesia was filled in Janushy
ary of 1979 and remained occupied until March of 1984 PDO-RE had a
full-time training officer from late 1979 until his unfortunate death
in early 1984 As of the PACD PDO-REstraining officer position
remained vacant
Under the heading of formal training PDO-RE and NRECA conducted 51
training courses A total of 535 persons participatedin the courses
many of whom attended two or more courses (See pages 10-13)
Training materials included a comprehensive Accounting Procedures
Manual Work Flow Manuals and numerous training materials on individual
subjects Unfortunately much of the NRECAPDO-RE training material
was lost in-November of 1984 when theSarinah office building was desshy
troyed by fire Key manuals were reconstructed from training materials
which had been distributed to the RECsprior to the fire
))
10 TRAINING COURSES
I COURSES HELD INJAKARTA
NUMBER OFCOURSE TITLE DATES HELD PARTICIPANTS
1 Project Orientation-planning April 4 -7th 1979 15 (PDO-RE staff)
2 Rural Member Service Specialists June 6 -11th1979 12 (Member Sdrvices Dept personnel)
3 Bookkeepers Training Course Nov 5 - 13th 1979 14
4 Electrical Genset Operation amp Nov 26 - Dec 1979 4 Maintenance
5 Accounting Reporting Dec 13 - 26th 1982 12
6 Pole Inspection Feb7 - lbth 1983 6
I COURSESHELD AT THE LAMPUNG REC
1 Management Seminar I May 2 - 5th 1979 8
2 Management Training Course II Oct 4 -6th 1979 10
3 Accounting Workshop Nov 24 - 29th 1980 6
4 Apprentice Linemen Feb9 -18th 1981 18 Training Course
5 Electrician Training Course Feb 12 19th 1981 9
6 Kwh Meter Meter Entrance April 22 10-23rd1981
Workshop
7 Construction Cost April 25 -May 1- 1981 9 Accounting II
8 Distribution System Operation May 29 -30th 1981 26 amp Maintenance
9 Meter Reading Billing June 16- 17th1981 9 Collection
11
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
10 Power Plant Recording and Reporting June 6181981 Workshop
11 AccountingReportingoperating June 19 21$-1981 5 Period
12 Cooperative Work Flow Procedure --March22 - 31st 1982 15
13 Engineering Procedure Rural June 14 shy 18th 1982- 7 Distribution System
14 Kwh Meter Testing 8March12 - 19th 1984
III COURSES HELD ATTHE LOMBOK REC NUMBER OF
COURSE TITLE DATES HELD PARTICIPANTS
1 Management Seminar may 21 24th 1979 9
2 Management Training Course II Sept24 26t 1979 - 11
3 Electrician-Trainors Training Course -Nov 5 l0th1979 3
4 ElectricianTraining Course Nov12 17th 1979 14
5 Electric Genset Operation amp Nov 26 - Dec 1 1979 4
Maintenance
6 Construction Material Management March 10 -15th 1980 6 and Construction Cost Accounting
7 Apprentice Linemen Training April7- 9th 1980 9 Course bull 28 - 30th 1980
May 1 - 10th 1980
8 Staff Oripn+a+4nn June 23rd 1980 9
12
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
9 Meter Reading Billing and June 24 - 25th 1980 6
Col lecting
10 Power Plant Operation amp Maintenance July 21- 26th- 1980 6
11 Distribution System Operation June 26 28th 1980 Aug 4 -
-
5th 1980and Maintenance
12 Safety and 12 First Aid Training July 21- 30th 1980
13 Staff OrientationSeminar Sep 29 Oct 41980 5
14 Power Plant Recording Oct 1 - 2nd 1980 8
15 Accounting Workshop Nov 24 - 29th 1980
16 Service Drops Service Entrance July 14 15th 1981 12
17 Cooperative Work Flow Procedure I shy-Eeb 1 4th 1982 12
18 CooperativeWprk FlowProcedure II April 28- May1st 1982 14
IV COURSES HELD AT LUWU REC
1 Management Seminar I May9- 12th 1979 8
2 Management Training Course II Oct 11 - 13th 1980 8
3 Electrician Training Course May 4 - 9th 1981 12
4 Linemen Training Course May 4- 25th 1981 12
5 Materials Management amp Housewlring May 18 - 19th 1981 9
gt1
13
NUMBER OF COURSE TITLE DATES HELD PARTICIPANT
6 Construction Cost Accounting 9May 19 - 23rd 1981
7 Meter Reading Billing and 13August 21 1981
Collection
8 Distribution System Oparation anc 23Aug 24- 25th 1981
Maintenance
9 Safety Procedures -August 25 1981 23
10 Service Drops and Staking Sheets August 261981 8
11 Cooperative Manaaement Wnrkqhnn 5August 27th 1981
12 Cooperative Workflow Procedure March 1 6th 1982 12
13 Safety Trainini January 21 -26 1923 24
RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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TABLE OF CONTENTS
INTRODUCTION
page 1 2Background
NRECA Team 3
Area Map 4
HISTORY
Project Development Office -
ProJect Funding 6 Rural Electric Cooperative Organization 7
Development
Management
Training 9-13 Rural Electrification Demonstration Projects 14-17
Electric) Power Supply 17-19
Construction 19-20
Business Operations 21-25
SUMMARYV
Lessons Learned 26-2 Recommendations 30-33 Financial ampOperating StatIstics 3
bull
INTRODUCTION
This report presents a history of the formation and development of
three RURAL ELECTRIC COOPERATIVES in Indonesia It covers events which
occurred from January 1979 the period when the cooperatives were orshy
ganized through December 1984 the United States Agency for Internashy
tional Development (USAID) Project Assistance Completion Date (PACD)
BACKGROUND
The Government of Indonesia (GOI) initiateda demonstration rural elecshy
trification program to provide areawide electric power distribution in
specified areas The objective of this program was to demonstrate conshy
clusively that reliable electric service and the social and economic
benefits that accrue therefrom can be made available to the very poor
people at a price they are able to pay
Three of the electrical power systems are located on separate islands
outside of Java and were implemented through rural electric cooperative
(REC) The three outer island systems are located on Central Lampung
South Sumatra (Sinar Siw Mego REC) East Lombok (Sinar Rinjani REC)
and Luwu SouthSulawesi (Samabotuna REC) and are being constructed and
developed by the member-consumers themselves through the rural electric
cooperative organizations Each cooperative owns and operates a diesel
generating plant to provide power for the electrical distribution
system and eachhas there own headquarters facilities A special
agency known as the Project Development Office (PDO) under the Departshy
ment of Cooperatives is the GOI implemening agency forthe cooperatives
2
USAID assisted the GOI in this demonstration including making available
AID grant funds to provide organizational management and technical
advisory services The National Rural Electric Cooperative Association
(NRECA) through its International Programs Division was contracted
by AID to provide these services The services for the Cooperatives
included complete assistance in the organization of the individual
cooperatives including staffing patterns job descriptions cost
accountingOampM methods training planning policies and procedures
housewiring and etc
USAID also made available grant funds for the services of anArchitecshy
tual and Eigineering-firm Chas T Main International Inc who was
responsible for commodity procurement headquarters and distribution
system design and construction (Information on these ativities are
included inChas T Mains final report dated December 1984)
3
The personnel which NRECA furnished for the performance of this contract are listed as follows
1 DENNIS WILSON Team Leader November 1978 -March -1980
2 PETER MCNEILL- Team Leader April 1980J-July i982
3 RAY SHOFF Team Leader August1982 -De 1
Administrative January- 1981 - July 1982 Officer
Training Officer January1979 - Sept 1980
4 LOUIESANSING Training Officer October 1980 - March 1984
July 1982
Lombok Project Advisor
February 1979 - Sept 1980
5 PAUL SWANSON Lombok Project Advisor
October 1980- July 1982
Luwu Project Advisor
March 1979 - Sept 1980
6 JOHN DEFOOR- Project October 1980 -Feb 1983 Advisor
7 LLOYD LAKE Lmpung Project Sept 1978 -July 1981 Advisor
8 CLAUDE FRANKE Lampung Project August 1981 -Advisor
91 WILLIAM GREG Administrative July 1979- Sept 1980 Officer
Intotal the NRECA team provided two hundred and seventy eight(278) person-months inOrganization-Management-Training Activities for the PDO and the three rural electic cooperatives
R UR AL E LEC T R IFI C ATIO N
C0OOP ER AT I VE P ROJ E CT SI TE S
edan
Su~uta~ adarig KALIMANTAN -
Palembang SULAWESI
LAM~PUNG
SINAR SIWO MEGO
Jaarta
Semarang Z AA Surabaya
Ujung Pandang LUWU VSAMABOTUNA
LMO TIMUR SINAR RINJANI
PROJECT DEVELOPMENT OFFICE FOR RURAL ELECTRIFICATION
I
As a condition precedent to release of US dollar loan funds a Project
Development Office for Rural Electrification (PDO-RE) was formed in
calendar year 1978 Originally the PDO-RE was directly under the office
of the Direptor General of Cooperatives but in 1983 when the GOI formed
a separate Ministry ofCooperatives PDb-REs reporting relationship
shifted to the Department of Cooperatives within this Ministry
With-assistance from NRECA the PDO-RE was organized and staffed for
three basic functions Organization of RECs and personnel training
budgeting andcontrol of loan funds for the RECs technical assistanrA
for engineering materialequipment procurement and construction
During the period 1978 to the end of 1984 USAIDs PACO personnel
complement varied from thirty (30) to sixty (60) persons and refinements
were made in-organizational structure
As with most new agencies time was required before thePDO-RE began
to function effectively The two major problems were minimal authority
in decision-making within the GOI framework and low salaries resulting
in a high personnel turnover
By USAIDs PACDI PDO-RE had developed key personnel in the accounting
and technical departments to provide continuing assistance to the RECs
Administrative functions within the PO-RE were performed efficiently
and requests for assistance in the development of additional rural
electrification projects were being processed
6
PROJECT FUNDING
Loan funds for the RECs were from two sources USAIDs commodity loan
and GOIs counterpart loan Originally the Canadian Government
through their international development agency approved a loan to fund
the power supply components of the project but this was not utilized
TheUSAID loan was in the amount of ten million dollars ($10000000)
divided between the three RECs Loan terms included two percent (2)
interest during theten year grace period-and three percent (3)
interest during the twenty year amortization period (30 year loan)
The GOI loan totalled the 1978 rupiah equivalent of $14402000 US
dollars which due to devaluation was only the equivalent of $5400000
US dollars at the time of the PACD Loan terms limited the grace
period to six years with a fourteen year amortization period (20 year
loan) The interest rate was set at six percent (6)
To identify and commit the end-user of these loan funds re-loan
agreements were executed between the GOI Bank Rakyat Indonesia (BRI)
and the three RECs PO0-RE and NRECA staff provided recommendations
on division of the loans between the three RECs using feasibilityshy
study projections as the basis for division Re-loan agreements
included the addition of six-tenths of one percent (6) service charge
for BRI raising the interest on the US dollar loan to 26 during
the grace period 36 during the amortization period and raising
interest on the GOI loan to 66
Both the USAID and GOI provided grant funds to develope the RECs
The USAID grant expenditures at the PACD were approximately six million
five hundred thousand $6500O00)dollars which was primarily for
architecture and engineering-consultants and organization-managementshy
training consultants
The GOI grant as stipulatedin the USAID-GOI loan was listed as the
rupiah equivalent of one million three hundred and fifteen thousand
($1315000)dollars forconsultant support Inaddition rupiah funds
were made available to svuport thePDO-RE andthe RECsfrom the GOIs
annual budget (DIP funds) At the PACD approximately Rp 4700000000
rupiah hadbeen expended for all purposes Thedollar equivalent
which is difficult to estimate due to drastic changes in rupiah-dollar
conversion rates may approximate $5700000
REC ORGANIZATIONAND DEVELOPMENT
ThePDORE and NRECA staff-assisted bylocal DGC staff conductea
information meetings in the three REC areas beginning inJanuary of
1979 This activity was followed by artual organization of eachREC
adoption of bylaws and election of directors By-April 1979 the
organizationphase of REC development had been completed
Temporary-offices were established within each REC area in 1979
lermanent headquarters facilities which included an office building
md a warehouse were completed and odcupied in 19831984
During the pre-construction period a small staff of about six people
was employed at each kEC When membership solicitation began and RE demonstration project construction started employee complement inshy
creased substantially
Listed below are statistics relating to the RECs servir areas and
organizationas of the PACD
KECAMATAN DESAS BOARD MEMBERS EMPLOYEES
Lampung 9 109 5 8i
Lombok 5 29 7 46
Luwu 5 51 9 76
MANAGEMENT
After organization a local DGC representative served as ProjectCoorshy
dinator and controller of GOI grant funds and also served as REC
Acting Manager Bythe end of 1980 PDO-RE had appointedan acting
manager for each REC from PDO-RE staff
Ironically at the PACD management was again by coordinator-manager
dual rolL at the Luwu REC and planswere being made to appoint the
Acting Manager as Coordinator at the Lombok REC As the RECs grow and
accept greater financial responsibilities with their own capital the
role of the Coordinator is diminishing Eventually as grant funding
is phased out the Coordinators position will be abolished and Managers
will be appointed on a permanent basis
9
TRAINING
The greatest activity for the NRECA OMT team was TRAINING -------shy
both formal class room training ---- and on-the-job training
Key employees of the PDO-RE first received training in the Philippines
with the Philippines National Electrification Administration (NEA)
Seven persons spent two weeks in the Philippines in 1978where NEA and
NRECA staff conducted training courses Later that year two key NEA
staff members came to Indonesia and assisted NRECA with first-stage
training for PDO-RE staff
The position of NRECA training officer in Indonesia was filled in Janushy
ary of 1979 and remained occupied until March of 1984 PDO-RE had a
full-time training officer from late 1979 until his unfortunate death
in early 1984 As of the PACD PDO-REstraining officer position
remained vacant
Under the heading of formal training PDO-RE and NRECA conducted 51
training courses A total of 535 persons participatedin the courses
many of whom attended two or more courses (See pages 10-13)
Training materials included a comprehensive Accounting Procedures
Manual Work Flow Manuals and numerous training materials on individual
subjects Unfortunately much of the NRECAPDO-RE training material
was lost in-November of 1984 when theSarinah office building was desshy
troyed by fire Key manuals were reconstructed from training materials
which had been distributed to the RECsprior to the fire
))
10 TRAINING COURSES
I COURSES HELD INJAKARTA
NUMBER OFCOURSE TITLE DATES HELD PARTICIPANTS
1 Project Orientation-planning April 4 -7th 1979 15 (PDO-RE staff)
2 Rural Member Service Specialists June 6 -11th1979 12 (Member Sdrvices Dept personnel)
3 Bookkeepers Training Course Nov 5 - 13th 1979 14
4 Electrical Genset Operation amp Nov 26 - Dec 1979 4 Maintenance
5 Accounting Reporting Dec 13 - 26th 1982 12
6 Pole Inspection Feb7 - lbth 1983 6
I COURSESHELD AT THE LAMPUNG REC
1 Management Seminar I May 2 - 5th 1979 8
2 Management Training Course II Oct 4 -6th 1979 10
3 Accounting Workshop Nov 24 - 29th 1980 6
4 Apprentice Linemen Feb9 -18th 1981 18 Training Course
5 Electrician Training Course Feb 12 19th 1981 9
6 Kwh Meter Meter Entrance April 22 10-23rd1981
Workshop
7 Construction Cost April 25 -May 1- 1981 9 Accounting II
8 Distribution System Operation May 29 -30th 1981 26 amp Maintenance
9 Meter Reading Billing June 16- 17th1981 9 Collection
11
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
10 Power Plant Recording and Reporting June 6181981 Workshop
11 AccountingReportingoperating June 19 21$-1981 5 Period
12 Cooperative Work Flow Procedure --March22 - 31st 1982 15
13 Engineering Procedure Rural June 14 shy 18th 1982- 7 Distribution System
14 Kwh Meter Testing 8March12 - 19th 1984
III COURSES HELD ATTHE LOMBOK REC NUMBER OF
COURSE TITLE DATES HELD PARTICIPANTS
1 Management Seminar may 21 24th 1979 9
2 Management Training Course II Sept24 26t 1979 - 11
3 Electrician-Trainors Training Course -Nov 5 l0th1979 3
4 ElectricianTraining Course Nov12 17th 1979 14
5 Electric Genset Operation amp Nov 26 - Dec 1 1979 4
Maintenance
6 Construction Material Management March 10 -15th 1980 6 and Construction Cost Accounting
7 Apprentice Linemen Training April7- 9th 1980 9 Course bull 28 - 30th 1980
May 1 - 10th 1980
8 Staff Oripn+a+4nn June 23rd 1980 9
12
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
9 Meter Reading Billing and June 24 - 25th 1980 6
Col lecting
10 Power Plant Operation amp Maintenance July 21- 26th- 1980 6
11 Distribution System Operation June 26 28th 1980 Aug 4 -
-
5th 1980and Maintenance
12 Safety and 12 First Aid Training July 21- 30th 1980
13 Staff OrientationSeminar Sep 29 Oct 41980 5
14 Power Plant Recording Oct 1 - 2nd 1980 8
15 Accounting Workshop Nov 24 - 29th 1980
16 Service Drops Service Entrance July 14 15th 1981 12
17 Cooperative Work Flow Procedure I shy-Eeb 1 4th 1982 12
18 CooperativeWprk FlowProcedure II April 28- May1st 1982 14
IV COURSES HELD AT LUWU REC
1 Management Seminar I May9- 12th 1979 8
2 Management Training Course II Oct 11 - 13th 1980 8
3 Electrician Training Course May 4 - 9th 1981 12
4 Linemen Training Course May 4- 25th 1981 12
5 Materials Management amp Housewlring May 18 - 19th 1981 9
gt1
13
NUMBER OF COURSE TITLE DATES HELD PARTICIPANT
6 Construction Cost Accounting 9May 19 - 23rd 1981
7 Meter Reading Billing and 13August 21 1981
Collection
8 Distribution System Oparation anc 23Aug 24- 25th 1981
Maintenance
9 Safety Procedures -August 25 1981 23
10 Service Drops and Staking Sheets August 261981 8
11 Cooperative Manaaement Wnrkqhnn 5August 27th 1981
12 Cooperative Workflow Procedure March 1 6th 1982 12
13 Safety Trainini January 21 -26 1923 24
RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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INTRODUCTION
This report presents a history of the formation and development of
three RURAL ELECTRIC COOPERATIVES in Indonesia It covers events which
occurred from January 1979 the period when the cooperatives were orshy
ganized through December 1984 the United States Agency for Internashy
tional Development (USAID) Project Assistance Completion Date (PACD)
BACKGROUND
The Government of Indonesia (GOI) initiateda demonstration rural elecshy
trification program to provide areawide electric power distribution in
specified areas The objective of this program was to demonstrate conshy
clusively that reliable electric service and the social and economic
benefits that accrue therefrom can be made available to the very poor
people at a price they are able to pay
Three of the electrical power systems are located on separate islands
outside of Java and were implemented through rural electric cooperative
(REC) The three outer island systems are located on Central Lampung
South Sumatra (Sinar Siw Mego REC) East Lombok (Sinar Rinjani REC)
and Luwu SouthSulawesi (Samabotuna REC) and are being constructed and
developed by the member-consumers themselves through the rural electric
cooperative organizations Each cooperative owns and operates a diesel
generating plant to provide power for the electrical distribution
system and eachhas there own headquarters facilities A special
agency known as the Project Development Office (PDO) under the Departshy
ment of Cooperatives is the GOI implemening agency forthe cooperatives
2
USAID assisted the GOI in this demonstration including making available
AID grant funds to provide organizational management and technical
advisory services The National Rural Electric Cooperative Association
(NRECA) through its International Programs Division was contracted
by AID to provide these services The services for the Cooperatives
included complete assistance in the organization of the individual
cooperatives including staffing patterns job descriptions cost
accountingOampM methods training planning policies and procedures
housewiring and etc
USAID also made available grant funds for the services of anArchitecshy
tual and Eigineering-firm Chas T Main International Inc who was
responsible for commodity procurement headquarters and distribution
system design and construction (Information on these ativities are
included inChas T Mains final report dated December 1984)
3
The personnel which NRECA furnished for the performance of this contract are listed as follows
1 DENNIS WILSON Team Leader November 1978 -March -1980
2 PETER MCNEILL- Team Leader April 1980J-July i982
3 RAY SHOFF Team Leader August1982 -De 1
Administrative January- 1981 - July 1982 Officer
Training Officer January1979 - Sept 1980
4 LOUIESANSING Training Officer October 1980 - March 1984
July 1982
Lombok Project Advisor
February 1979 - Sept 1980
5 PAUL SWANSON Lombok Project Advisor
October 1980- July 1982
Luwu Project Advisor
March 1979 - Sept 1980
6 JOHN DEFOOR- Project October 1980 -Feb 1983 Advisor
7 LLOYD LAKE Lmpung Project Sept 1978 -July 1981 Advisor
8 CLAUDE FRANKE Lampung Project August 1981 -Advisor
91 WILLIAM GREG Administrative July 1979- Sept 1980 Officer
Intotal the NRECA team provided two hundred and seventy eight(278) person-months inOrganization-Management-Training Activities for the PDO and the three rural electic cooperatives
R UR AL E LEC T R IFI C ATIO N
C0OOP ER AT I VE P ROJ E CT SI TE S
edan
Su~uta~ adarig KALIMANTAN -
Palembang SULAWESI
LAM~PUNG
SINAR SIWO MEGO
Jaarta
Semarang Z AA Surabaya
Ujung Pandang LUWU VSAMABOTUNA
LMO TIMUR SINAR RINJANI
PROJECT DEVELOPMENT OFFICE FOR RURAL ELECTRIFICATION
I
As a condition precedent to release of US dollar loan funds a Project
Development Office for Rural Electrification (PDO-RE) was formed in
calendar year 1978 Originally the PDO-RE was directly under the office
of the Direptor General of Cooperatives but in 1983 when the GOI formed
a separate Ministry ofCooperatives PDb-REs reporting relationship
shifted to the Department of Cooperatives within this Ministry
With-assistance from NRECA the PDO-RE was organized and staffed for
three basic functions Organization of RECs and personnel training
budgeting andcontrol of loan funds for the RECs technical assistanrA
for engineering materialequipment procurement and construction
During the period 1978 to the end of 1984 USAIDs PACO personnel
complement varied from thirty (30) to sixty (60) persons and refinements
were made in-organizational structure
As with most new agencies time was required before thePDO-RE began
to function effectively The two major problems were minimal authority
in decision-making within the GOI framework and low salaries resulting
in a high personnel turnover
By USAIDs PACDI PDO-RE had developed key personnel in the accounting
and technical departments to provide continuing assistance to the RECs
Administrative functions within the PO-RE were performed efficiently
and requests for assistance in the development of additional rural
electrification projects were being processed
6
PROJECT FUNDING
Loan funds for the RECs were from two sources USAIDs commodity loan
and GOIs counterpart loan Originally the Canadian Government
through their international development agency approved a loan to fund
the power supply components of the project but this was not utilized
TheUSAID loan was in the amount of ten million dollars ($10000000)
divided between the three RECs Loan terms included two percent (2)
interest during theten year grace period-and three percent (3)
interest during the twenty year amortization period (30 year loan)
The GOI loan totalled the 1978 rupiah equivalent of $14402000 US
dollars which due to devaluation was only the equivalent of $5400000
US dollars at the time of the PACD Loan terms limited the grace
period to six years with a fourteen year amortization period (20 year
loan) The interest rate was set at six percent (6)
To identify and commit the end-user of these loan funds re-loan
agreements were executed between the GOI Bank Rakyat Indonesia (BRI)
and the three RECs PO0-RE and NRECA staff provided recommendations
on division of the loans between the three RECs using feasibilityshy
study projections as the basis for division Re-loan agreements
included the addition of six-tenths of one percent (6) service charge
for BRI raising the interest on the US dollar loan to 26 during
the grace period 36 during the amortization period and raising
interest on the GOI loan to 66
Both the USAID and GOI provided grant funds to develope the RECs
The USAID grant expenditures at the PACD were approximately six million
five hundred thousand $6500O00)dollars which was primarily for
architecture and engineering-consultants and organization-managementshy
training consultants
The GOI grant as stipulatedin the USAID-GOI loan was listed as the
rupiah equivalent of one million three hundred and fifteen thousand
($1315000)dollars forconsultant support Inaddition rupiah funds
were made available to svuport thePDO-RE andthe RECsfrom the GOIs
annual budget (DIP funds) At the PACD approximately Rp 4700000000
rupiah hadbeen expended for all purposes Thedollar equivalent
which is difficult to estimate due to drastic changes in rupiah-dollar
conversion rates may approximate $5700000
REC ORGANIZATIONAND DEVELOPMENT
ThePDORE and NRECA staff-assisted bylocal DGC staff conductea
information meetings in the three REC areas beginning inJanuary of
1979 This activity was followed by artual organization of eachREC
adoption of bylaws and election of directors By-April 1979 the
organizationphase of REC development had been completed
Temporary-offices were established within each REC area in 1979
lermanent headquarters facilities which included an office building
md a warehouse were completed and odcupied in 19831984
During the pre-construction period a small staff of about six people
was employed at each kEC When membership solicitation began and RE demonstration project construction started employee complement inshy
creased substantially
Listed below are statistics relating to the RECs servir areas and
organizationas of the PACD
KECAMATAN DESAS BOARD MEMBERS EMPLOYEES
Lampung 9 109 5 8i
Lombok 5 29 7 46
Luwu 5 51 9 76
MANAGEMENT
After organization a local DGC representative served as ProjectCoorshy
dinator and controller of GOI grant funds and also served as REC
Acting Manager Bythe end of 1980 PDO-RE had appointedan acting
manager for each REC from PDO-RE staff
Ironically at the PACD management was again by coordinator-manager
dual rolL at the Luwu REC and planswere being made to appoint the
Acting Manager as Coordinator at the Lombok REC As the RECs grow and
accept greater financial responsibilities with their own capital the
role of the Coordinator is diminishing Eventually as grant funding
is phased out the Coordinators position will be abolished and Managers
will be appointed on a permanent basis
9
TRAINING
The greatest activity for the NRECA OMT team was TRAINING -------shy
both formal class room training ---- and on-the-job training
Key employees of the PDO-RE first received training in the Philippines
with the Philippines National Electrification Administration (NEA)
Seven persons spent two weeks in the Philippines in 1978where NEA and
NRECA staff conducted training courses Later that year two key NEA
staff members came to Indonesia and assisted NRECA with first-stage
training for PDO-RE staff
The position of NRECA training officer in Indonesia was filled in Janushy
ary of 1979 and remained occupied until March of 1984 PDO-RE had a
full-time training officer from late 1979 until his unfortunate death
in early 1984 As of the PACD PDO-REstraining officer position
remained vacant
Under the heading of formal training PDO-RE and NRECA conducted 51
training courses A total of 535 persons participatedin the courses
many of whom attended two or more courses (See pages 10-13)
Training materials included a comprehensive Accounting Procedures
Manual Work Flow Manuals and numerous training materials on individual
subjects Unfortunately much of the NRECAPDO-RE training material
was lost in-November of 1984 when theSarinah office building was desshy
troyed by fire Key manuals were reconstructed from training materials
which had been distributed to the RECsprior to the fire
))
10 TRAINING COURSES
I COURSES HELD INJAKARTA
NUMBER OFCOURSE TITLE DATES HELD PARTICIPANTS
1 Project Orientation-planning April 4 -7th 1979 15 (PDO-RE staff)
2 Rural Member Service Specialists June 6 -11th1979 12 (Member Sdrvices Dept personnel)
3 Bookkeepers Training Course Nov 5 - 13th 1979 14
4 Electrical Genset Operation amp Nov 26 - Dec 1979 4 Maintenance
5 Accounting Reporting Dec 13 - 26th 1982 12
6 Pole Inspection Feb7 - lbth 1983 6
I COURSESHELD AT THE LAMPUNG REC
1 Management Seminar I May 2 - 5th 1979 8
2 Management Training Course II Oct 4 -6th 1979 10
3 Accounting Workshop Nov 24 - 29th 1980 6
4 Apprentice Linemen Feb9 -18th 1981 18 Training Course
5 Electrician Training Course Feb 12 19th 1981 9
6 Kwh Meter Meter Entrance April 22 10-23rd1981
Workshop
7 Construction Cost April 25 -May 1- 1981 9 Accounting II
8 Distribution System Operation May 29 -30th 1981 26 amp Maintenance
9 Meter Reading Billing June 16- 17th1981 9 Collection
11
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
10 Power Plant Recording and Reporting June 6181981 Workshop
11 AccountingReportingoperating June 19 21$-1981 5 Period
12 Cooperative Work Flow Procedure --March22 - 31st 1982 15
13 Engineering Procedure Rural June 14 shy 18th 1982- 7 Distribution System
14 Kwh Meter Testing 8March12 - 19th 1984
III COURSES HELD ATTHE LOMBOK REC NUMBER OF
COURSE TITLE DATES HELD PARTICIPANTS
1 Management Seminar may 21 24th 1979 9
2 Management Training Course II Sept24 26t 1979 - 11
3 Electrician-Trainors Training Course -Nov 5 l0th1979 3
4 ElectricianTraining Course Nov12 17th 1979 14
5 Electric Genset Operation amp Nov 26 - Dec 1 1979 4
Maintenance
6 Construction Material Management March 10 -15th 1980 6 and Construction Cost Accounting
7 Apprentice Linemen Training April7- 9th 1980 9 Course bull 28 - 30th 1980
May 1 - 10th 1980
8 Staff Oripn+a+4nn June 23rd 1980 9
12
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
9 Meter Reading Billing and June 24 - 25th 1980 6
Col lecting
10 Power Plant Operation amp Maintenance July 21- 26th- 1980 6
11 Distribution System Operation June 26 28th 1980 Aug 4 -
-
5th 1980and Maintenance
12 Safety and 12 First Aid Training July 21- 30th 1980
13 Staff OrientationSeminar Sep 29 Oct 41980 5
14 Power Plant Recording Oct 1 - 2nd 1980 8
15 Accounting Workshop Nov 24 - 29th 1980
16 Service Drops Service Entrance July 14 15th 1981 12
17 Cooperative Work Flow Procedure I shy-Eeb 1 4th 1982 12
18 CooperativeWprk FlowProcedure II April 28- May1st 1982 14
IV COURSES HELD AT LUWU REC
1 Management Seminar I May9- 12th 1979 8
2 Management Training Course II Oct 11 - 13th 1980 8
3 Electrician Training Course May 4 - 9th 1981 12
4 Linemen Training Course May 4- 25th 1981 12
5 Materials Management amp Housewlring May 18 - 19th 1981 9
gt1
13
NUMBER OF COURSE TITLE DATES HELD PARTICIPANT
6 Construction Cost Accounting 9May 19 - 23rd 1981
7 Meter Reading Billing and 13August 21 1981
Collection
8 Distribution System Oparation anc 23Aug 24- 25th 1981
Maintenance
9 Safety Procedures -August 25 1981 23
10 Service Drops and Staking Sheets August 261981 8
11 Cooperative Manaaement Wnrkqhnn 5August 27th 1981
12 Cooperative Workflow Procedure March 1 6th 1982 12
13 Safety Trainini January 21 -26 1923 24
RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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2
USAID assisted the GOI in this demonstration including making available
AID grant funds to provide organizational management and technical
advisory services The National Rural Electric Cooperative Association
(NRECA) through its International Programs Division was contracted
by AID to provide these services The services for the Cooperatives
included complete assistance in the organization of the individual
cooperatives including staffing patterns job descriptions cost
accountingOampM methods training planning policies and procedures
housewiring and etc
USAID also made available grant funds for the services of anArchitecshy
tual and Eigineering-firm Chas T Main International Inc who was
responsible for commodity procurement headquarters and distribution
system design and construction (Information on these ativities are
included inChas T Mains final report dated December 1984)
3
The personnel which NRECA furnished for the performance of this contract are listed as follows
1 DENNIS WILSON Team Leader November 1978 -March -1980
2 PETER MCNEILL- Team Leader April 1980J-July i982
3 RAY SHOFF Team Leader August1982 -De 1
Administrative January- 1981 - July 1982 Officer
Training Officer January1979 - Sept 1980
4 LOUIESANSING Training Officer October 1980 - March 1984
July 1982
Lombok Project Advisor
February 1979 - Sept 1980
5 PAUL SWANSON Lombok Project Advisor
October 1980- July 1982
Luwu Project Advisor
March 1979 - Sept 1980
6 JOHN DEFOOR- Project October 1980 -Feb 1983 Advisor
7 LLOYD LAKE Lmpung Project Sept 1978 -July 1981 Advisor
8 CLAUDE FRANKE Lampung Project August 1981 -Advisor
91 WILLIAM GREG Administrative July 1979- Sept 1980 Officer
Intotal the NRECA team provided two hundred and seventy eight(278) person-months inOrganization-Management-Training Activities for the PDO and the three rural electic cooperatives
R UR AL E LEC T R IFI C ATIO N
C0OOP ER AT I VE P ROJ E CT SI TE S
edan
Su~uta~ adarig KALIMANTAN -
Palembang SULAWESI
LAM~PUNG
SINAR SIWO MEGO
Jaarta
Semarang Z AA Surabaya
Ujung Pandang LUWU VSAMABOTUNA
LMO TIMUR SINAR RINJANI
PROJECT DEVELOPMENT OFFICE FOR RURAL ELECTRIFICATION
I
As a condition precedent to release of US dollar loan funds a Project
Development Office for Rural Electrification (PDO-RE) was formed in
calendar year 1978 Originally the PDO-RE was directly under the office
of the Direptor General of Cooperatives but in 1983 when the GOI formed
a separate Ministry ofCooperatives PDb-REs reporting relationship
shifted to the Department of Cooperatives within this Ministry
With-assistance from NRECA the PDO-RE was organized and staffed for
three basic functions Organization of RECs and personnel training
budgeting andcontrol of loan funds for the RECs technical assistanrA
for engineering materialequipment procurement and construction
During the period 1978 to the end of 1984 USAIDs PACO personnel
complement varied from thirty (30) to sixty (60) persons and refinements
were made in-organizational structure
As with most new agencies time was required before thePDO-RE began
to function effectively The two major problems were minimal authority
in decision-making within the GOI framework and low salaries resulting
in a high personnel turnover
By USAIDs PACDI PDO-RE had developed key personnel in the accounting
and technical departments to provide continuing assistance to the RECs
Administrative functions within the PO-RE were performed efficiently
and requests for assistance in the development of additional rural
electrification projects were being processed
6
PROJECT FUNDING
Loan funds for the RECs were from two sources USAIDs commodity loan
and GOIs counterpart loan Originally the Canadian Government
through their international development agency approved a loan to fund
the power supply components of the project but this was not utilized
TheUSAID loan was in the amount of ten million dollars ($10000000)
divided between the three RECs Loan terms included two percent (2)
interest during theten year grace period-and three percent (3)
interest during the twenty year amortization period (30 year loan)
The GOI loan totalled the 1978 rupiah equivalent of $14402000 US
dollars which due to devaluation was only the equivalent of $5400000
US dollars at the time of the PACD Loan terms limited the grace
period to six years with a fourteen year amortization period (20 year
loan) The interest rate was set at six percent (6)
To identify and commit the end-user of these loan funds re-loan
agreements were executed between the GOI Bank Rakyat Indonesia (BRI)
and the three RECs PO0-RE and NRECA staff provided recommendations
on division of the loans between the three RECs using feasibilityshy
study projections as the basis for division Re-loan agreements
included the addition of six-tenths of one percent (6) service charge
for BRI raising the interest on the US dollar loan to 26 during
the grace period 36 during the amortization period and raising
interest on the GOI loan to 66
Both the USAID and GOI provided grant funds to develope the RECs
The USAID grant expenditures at the PACD were approximately six million
five hundred thousand $6500O00)dollars which was primarily for
architecture and engineering-consultants and organization-managementshy
training consultants
The GOI grant as stipulatedin the USAID-GOI loan was listed as the
rupiah equivalent of one million three hundred and fifteen thousand
($1315000)dollars forconsultant support Inaddition rupiah funds
were made available to svuport thePDO-RE andthe RECsfrom the GOIs
annual budget (DIP funds) At the PACD approximately Rp 4700000000
rupiah hadbeen expended for all purposes Thedollar equivalent
which is difficult to estimate due to drastic changes in rupiah-dollar
conversion rates may approximate $5700000
REC ORGANIZATIONAND DEVELOPMENT
ThePDORE and NRECA staff-assisted bylocal DGC staff conductea
information meetings in the three REC areas beginning inJanuary of
1979 This activity was followed by artual organization of eachREC
adoption of bylaws and election of directors By-April 1979 the
organizationphase of REC development had been completed
Temporary-offices were established within each REC area in 1979
lermanent headquarters facilities which included an office building
md a warehouse were completed and odcupied in 19831984
During the pre-construction period a small staff of about six people
was employed at each kEC When membership solicitation began and RE demonstration project construction started employee complement inshy
creased substantially
Listed below are statistics relating to the RECs servir areas and
organizationas of the PACD
KECAMATAN DESAS BOARD MEMBERS EMPLOYEES
Lampung 9 109 5 8i
Lombok 5 29 7 46
Luwu 5 51 9 76
MANAGEMENT
After organization a local DGC representative served as ProjectCoorshy
dinator and controller of GOI grant funds and also served as REC
Acting Manager Bythe end of 1980 PDO-RE had appointedan acting
manager for each REC from PDO-RE staff
Ironically at the PACD management was again by coordinator-manager
dual rolL at the Luwu REC and planswere being made to appoint the
Acting Manager as Coordinator at the Lombok REC As the RECs grow and
accept greater financial responsibilities with their own capital the
role of the Coordinator is diminishing Eventually as grant funding
is phased out the Coordinators position will be abolished and Managers
will be appointed on a permanent basis
9
TRAINING
The greatest activity for the NRECA OMT team was TRAINING -------shy
both formal class room training ---- and on-the-job training
Key employees of the PDO-RE first received training in the Philippines
with the Philippines National Electrification Administration (NEA)
Seven persons spent two weeks in the Philippines in 1978where NEA and
NRECA staff conducted training courses Later that year two key NEA
staff members came to Indonesia and assisted NRECA with first-stage
training for PDO-RE staff
The position of NRECA training officer in Indonesia was filled in Janushy
ary of 1979 and remained occupied until March of 1984 PDO-RE had a
full-time training officer from late 1979 until his unfortunate death
in early 1984 As of the PACD PDO-REstraining officer position
remained vacant
Under the heading of formal training PDO-RE and NRECA conducted 51
training courses A total of 535 persons participatedin the courses
many of whom attended two or more courses (See pages 10-13)
Training materials included a comprehensive Accounting Procedures
Manual Work Flow Manuals and numerous training materials on individual
subjects Unfortunately much of the NRECAPDO-RE training material
was lost in-November of 1984 when theSarinah office building was desshy
troyed by fire Key manuals were reconstructed from training materials
which had been distributed to the RECsprior to the fire
))
10 TRAINING COURSES
I COURSES HELD INJAKARTA
NUMBER OFCOURSE TITLE DATES HELD PARTICIPANTS
1 Project Orientation-planning April 4 -7th 1979 15 (PDO-RE staff)
2 Rural Member Service Specialists June 6 -11th1979 12 (Member Sdrvices Dept personnel)
3 Bookkeepers Training Course Nov 5 - 13th 1979 14
4 Electrical Genset Operation amp Nov 26 - Dec 1979 4 Maintenance
5 Accounting Reporting Dec 13 - 26th 1982 12
6 Pole Inspection Feb7 - lbth 1983 6
I COURSESHELD AT THE LAMPUNG REC
1 Management Seminar I May 2 - 5th 1979 8
2 Management Training Course II Oct 4 -6th 1979 10
3 Accounting Workshop Nov 24 - 29th 1980 6
4 Apprentice Linemen Feb9 -18th 1981 18 Training Course
5 Electrician Training Course Feb 12 19th 1981 9
6 Kwh Meter Meter Entrance April 22 10-23rd1981
Workshop
7 Construction Cost April 25 -May 1- 1981 9 Accounting II
8 Distribution System Operation May 29 -30th 1981 26 amp Maintenance
9 Meter Reading Billing June 16- 17th1981 9 Collection
11
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
10 Power Plant Recording and Reporting June 6181981 Workshop
11 AccountingReportingoperating June 19 21$-1981 5 Period
12 Cooperative Work Flow Procedure --March22 - 31st 1982 15
13 Engineering Procedure Rural June 14 shy 18th 1982- 7 Distribution System
14 Kwh Meter Testing 8March12 - 19th 1984
III COURSES HELD ATTHE LOMBOK REC NUMBER OF
COURSE TITLE DATES HELD PARTICIPANTS
1 Management Seminar may 21 24th 1979 9
2 Management Training Course II Sept24 26t 1979 - 11
3 Electrician-Trainors Training Course -Nov 5 l0th1979 3
4 ElectricianTraining Course Nov12 17th 1979 14
5 Electric Genset Operation amp Nov 26 - Dec 1 1979 4
Maintenance
6 Construction Material Management March 10 -15th 1980 6 and Construction Cost Accounting
7 Apprentice Linemen Training April7- 9th 1980 9 Course bull 28 - 30th 1980
May 1 - 10th 1980
8 Staff Oripn+a+4nn June 23rd 1980 9
12
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
9 Meter Reading Billing and June 24 - 25th 1980 6
Col lecting
10 Power Plant Operation amp Maintenance July 21- 26th- 1980 6
11 Distribution System Operation June 26 28th 1980 Aug 4 -
-
5th 1980and Maintenance
12 Safety and 12 First Aid Training July 21- 30th 1980
13 Staff OrientationSeminar Sep 29 Oct 41980 5
14 Power Plant Recording Oct 1 - 2nd 1980 8
15 Accounting Workshop Nov 24 - 29th 1980
16 Service Drops Service Entrance July 14 15th 1981 12
17 Cooperative Work Flow Procedure I shy-Eeb 1 4th 1982 12
18 CooperativeWprk FlowProcedure II April 28- May1st 1982 14
IV COURSES HELD AT LUWU REC
1 Management Seminar I May9- 12th 1979 8
2 Management Training Course II Oct 11 - 13th 1980 8
3 Electrician Training Course May 4 - 9th 1981 12
4 Linemen Training Course May 4- 25th 1981 12
5 Materials Management amp Housewlring May 18 - 19th 1981 9
gt1
13
NUMBER OF COURSE TITLE DATES HELD PARTICIPANT
6 Construction Cost Accounting 9May 19 - 23rd 1981
7 Meter Reading Billing and 13August 21 1981
Collection
8 Distribution System Oparation anc 23Aug 24- 25th 1981
Maintenance
9 Safety Procedures -August 25 1981 23
10 Service Drops and Staking Sheets August 261981 8
11 Cooperative Manaaement Wnrkqhnn 5August 27th 1981
12 Cooperative Workflow Procedure March 1 6th 1982 12
13 Safety Trainini January 21 -26 1923 24
RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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3
The personnel which NRECA furnished for the performance of this contract are listed as follows
1 DENNIS WILSON Team Leader November 1978 -March -1980
2 PETER MCNEILL- Team Leader April 1980J-July i982
3 RAY SHOFF Team Leader August1982 -De 1
Administrative January- 1981 - July 1982 Officer
Training Officer January1979 - Sept 1980
4 LOUIESANSING Training Officer October 1980 - March 1984
July 1982
Lombok Project Advisor
February 1979 - Sept 1980
5 PAUL SWANSON Lombok Project Advisor
October 1980- July 1982
Luwu Project Advisor
March 1979 - Sept 1980
6 JOHN DEFOOR- Project October 1980 -Feb 1983 Advisor
7 LLOYD LAKE Lmpung Project Sept 1978 -July 1981 Advisor
8 CLAUDE FRANKE Lampung Project August 1981 -Advisor
91 WILLIAM GREG Administrative July 1979- Sept 1980 Officer
Intotal the NRECA team provided two hundred and seventy eight(278) person-months inOrganization-Management-Training Activities for the PDO and the three rural electic cooperatives
R UR AL E LEC T R IFI C ATIO N
C0OOP ER AT I VE P ROJ E CT SI TE S
edan
Su~uta~ adarig KALIMANTAN -
Palembang SULAWESI
LAM~PUNG
SINAR SIWO MEGO
Jaarta
Semarang Z AA Surabaya
Ujung Pandang LUWU VSAMABOTUNA
LMO TIMUR SINAR RINJANI
PROJECT DEVELOPMENT OFFICE FOR RURAL ELECTRIFICATION
I
As a condition precedent to release of US dollar loan funds a Project
Development Office for Rural Electrification (PDO-RE) was formed in
calendar year 1978 Originally the PDO-RE was directly under the office
of the Direptor General of Cooperatives but in 1983 when the GOI formed
a separate Ministry ofCooperatives PDb-REs reporting relationship
shifted to the Department of Cooperatives within this Ministry
With-assistance from NRECA the PDO-RE was organized and staffed for
three basic functions Organization of RECs and personnel training
budgeting andcontrol of loan funds for the RECs technical assistanrA
for engineering materialequipment procurement and construction
During the period 1978 to the end of 1984 USAIDs PACO personnel
complement varied from thirty (30) to sixty (60) persons and refinements
were made in-organizational structure
As with most new agencies time was required before thePDO-RE began
to function effectively The two major problems were minimal authority
in decision-making within the GOI framework and low salaries resulting
in a high personnel turnover
By USAIDs PACDI PDO-RE had developed key personnel in the accounting
and technical departments to provide continuing assistance to the RECs
Administrative functions within the PO-RE were performed efficiently
and requests for assistance in the development of additional rural
electrification projects were being processed
6
PROJECT FUNDING
Loan funds for the RECs were from two sources USAIDs commodity loan
and GOIs counterpart loan Originally the Canadian Government
through their international development agency approved a loan to fund
the power supply components of the project but this was not utilized
TheUSAID loan was in the amount of ten million dollars ($10000000)
divided between the three RECs Loan terms included two percent (2)
interest during theten year grace period-and three percent (3)
interest during the twenty year amortization period (30 year loan)
The GOI loan totalled the 1978 rupiah equivalent of $14402000 US
dollars which due to devaluation was only the equivalent of $5400000
US dollars at the time of the PACD Loan terms limited the grace
period to six years with a fourteen year amortization period (20 year
loan) The interest rate was set at six percent (6)
To identify and commit the end-user of these loan funds re-loan
agreements were executed between the GOI Bank Rakyat Indonesia (BRI)
and the three RECs PO0-RE and NRECA staff provided recommendations
on division of the loans between the three RECs using feasibilityshy
study projections as the basis for division Re-loan agreements
included the addition of six-tenths of one percent (6) service charge
for BRI raising the interest on the US dollar loan to 26 during
the grace period 36 during the amortization period and raising
interest on the GOI loan to 66
Both the USAID and GOI provided grant funds to develope the RECs
The USAID grant expenditures at the PACD were approximately six million
five hundred thousand $6500O00)dollars which was primarily for
architecture and engineering-consultants and organization-managementshy
training consultants
The GOI grant as stipulatedin the USAID-GOI loan was listed as the
rupiah equivalent of one million three hundred and fifteen thousand
($1315000)dollars forconsultant support Inaddition rupiah funds
were made available to svuport thePDO-RE andthe RECsfrom the GOIs
annual budget (DIP funds) At the PACD approximately Rp 4700000000
rupiah hadbeen expended for all purposes Thedollar equivalent
which is difficult to estimate due to drastic changes in rupiah-dollar
conversion rates may approximate $5700000
REC ORGANIZATIONAND DEVELOPMENT
ThePDORE and NRECA staff-assisted bylocal DGC staff conductea
information meetings in the three REC areas beginning inJanuary of
1979 This activity was followed by artual organization of eachREC
adoption of bylaws and election of directors By-April 1979 the
organizationphase of REC development had been completed
Temporary-offices were established within each REC area in 1979
lermanent headquarters facilities which included an office building
md a warehouse were completed and odcupied in 19831984
During the pre-construction period a small staff of about six people
was employed at each kEC When membership solicitation began and RE demonstration project construction started employee complement inshy
creased substantially
Listed below are statistics relating to the RECs servir areas and
organizationas of the PACD
KECAMATAN DESAS BOARD MEMBERS EMPLOYEES
Lampung 9 109 5 8i
Lombok 5 29 7 46
Luwu 5 51 9 76
MANAGEMENT
After organization a local DGC representative served as ProjectCoorshy
dinator and controller of GOI grant funds and also served as REC
Acting Manager Bythe end of 1980 PDO-RE had appointedan acting
manager for each REC from PDO-RE staff
Ironically at the PACD management was again by coordinator-manager
dual rolL at the Luwu REC and planswere being made to appoint the
Acting Manager as Coordinator at the Lombok REC As the RECs grow and
accept greater financial responsibilities with their own capital the
role of the Coordinator is diminishing Eventually as grant funding
is phased out the Coordinators position will be abolished and Managers
will be appointed on a permanent basis
9
TRAINING
The greatest activity for the NRECA OMT team was TRAINING -------shy
both formal class room training ---- and on-the-job training
Key employees of the PDO-RE first received training in the Philippines
with the Philippines National Electrification Administration (NEA)
Seven persons spent two weeks in the Philippines in 1978where NEA and
NRECA staff conducted training courses Later that year two key NEA
staff members came to Indonesia and assisted NRECA with first-stage
training for PDO-RE staff
The position of NRECA training officer in Indonesia was filled in Janushy
ary of 1979 and remained occupied until March of 1984 PDO-RE had a
full-time training officer from late 1979 until his unfortunate death
in early 1984 As of the PACD PDO-REstraining officer position
remained vacant
Under the heading of formal training PDO-RE and NRECA conducted 51
training courses A total of 535 persons participatedin the courses
many of whom attended two or more courses (See pages 10-13)
Training materials included a comprehensive Accounting Procedures
Manual Work Flow Manuals and numerous training materials on individual
subjects Unfortunately much of the NRECAPDO-RE training material
was lost in-November of 1984 when theSarinah office building was desshy
troyed by fire Key manuals were reconstructed from training materials
which had been distributed to the RECsprior to the fire
))
10 TRAINING COURSES
I COURSES HELD INJAKARTA
NUMBER OFCOURSE TITLE DATES HELD PARTICIPANTS
1 Project Orientation-planning April 4 -7th 1979 15 (PDO-RE staff)
2 Rural Member Service Specialists June 6 -11th1979 12 (Member Sdrvices Dept personnel)
3 Bookkeepers Training Course Nov 5 - 13th 1979 14
4 Electrical Genset Operation amp Nov 26 - Dec 1979 4 Maintenance
5 Accounting Reporting Dec 13 - 26th 1982 12
6 Pole Inspection Feb7 - lbth 1983 6
I COURSESHELD AT THE LAMPUNG REC
1 Management Seminar I May 2 - 5th 1979 8
2 Management Training Course II Oct 4 -6th 1979 10
3 Accounting Workshop Nov 24 - 29th 1980 6
4 Apprentice Linemen Feb9 -18th 1981 18 Training Course
5 Electrician Training Course Feb 12 19th 1981 9
6 Kwh Meter Meter Entrance April 22 10-23rd1981
Workshop
7 Construction Cost April 25 -May 1- 1981 9 Accounting II
8 Distribution System Operation May 29 -30th 1981 26 amp Maintenance
9 Meter Reading Billing June 16- 17th1981 9 Collection
11
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
10 Power Plant Recording and Reporting June 6181981 Workshop
11 AccountingReportingoperating June 19 21$-1981 5 Period
12 Cooperative Work Flow Procedure --March22 - 31st 1982 15
13 Engineering Procedure Rural June 14 shy 18th 1982- 7 Distribution System
14 Kwh Meter Testing 8March12 - 19th 1984
III COURSES HELD ATTHE LOMBOK REC NUMBER OF
COURSE TITLE DATES HELD PARTICIPANTS
1 Management Seminar may 21 24th 1979 9
2 Management Training Course II Sept24 26t 1979 - 11
3 Electrician-Trainors Training Course -Nov 5 l0th1979 3
4 ElectricianTraining Course Nov12 17th 1979 14
5 Electric Genset Operation amp Nov 26 - Dec 1 1979 4
Maintenance
6 Construction Material Management March 10 -15th 1980 6 and Construction Cost Accounting
7 Apprentice Linemen Training April7- 9th 1980 9 Course bull 28 - 30th 1980
May 1 - 10th 1980
8 Staff Oripn+a+4nn June 23rd 1980 9
12
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
9 Meter Reading Billing and June 24 - 25th 1980 6
Col lecting
10 Power Plant Operation amp Maintenance July 21- 26th- 1980 6
11 Distribution System Operation June 26 28th 1980 Aug 4 -
-
5th 1980and Maintenance
12 Safety and 12 First Aid Training July 21- 30th 1980
13 Staff OrientationSeminar Sep 29 Oct 41980 5
14 Power Plant Recording Oct 1 - 2nd 1980 8
15 Accounting Workshop Nov 24 - 29th 1980
16 Service Drops Service Entrance July 14 15th 1981 12
17 Cooperative Work Flow Procedure I shy-Eeb 1 4th 1982 12
18 CooperativeWprk FlowProcedure II April 28- May1st 1982 14
IV COURSES HELD AT LUWU REC
1 Management Seminar I May9- 12th 1979 8
2 Management Training Course II Oct 11 - 13th 1980 8
3 Electrician Training Course May 4 - 9th 1981 12
4 Linemen Training Course May 4- 25th 1981 12
5 Materials Management amp Housewlring May 18 - 19th 1981 9
gt1
13
NUMBER OF COURSE TITLE DATES HELD PARTICIPANT
6 Construction Cost Accounting 9May 19 - 23rd 1981
7 Meter Reading Billing and 13August 21 1981
Collection
8 Distribution System Oparation anc 23Aug 24- 25th 1981
Maintenance
9 Safety Procedures -August 25 1981 23
10 Service Drops and Staking Sheets August 261981 8
11 Cooperative Manaaement Wnrkqhnn 5August 27th 1981
12 Cooperative Workflow Procedure March 1 6th 1982 12
13 Safety Trainini January 21 -26 1923 24
RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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R UR AL E LEC T R IFI C ATIO N
C0OOP ER AT I VE P ROJ E CT SI TE S
edan
Su~uta~ adarig KALIMANTAN -
Palembang SULAWESI
LAM~PUNG
SINAR SIWO MEGO
Jaarta
Semarang Z AA Surabaya
Ujung Pandang LUWU VSAMABOTUNA
LMO TIMUR SINAR RINJANI
PROJECT DEVELOPMENT OFFICE FOR RURAL ELECTRIFICATION
I
As a condition precedent to release of US dollar loan funds a Project
Development Office for Rural Electrification (PDO-RE) was formed in
calendar year 1978 Originally the PDO-RE was directly under the office
of the Direptor General of Cooperatives but in 1983 when the GOI formed
a separate Ministry ofCooperatives PDb-REs reporting relationship
shifted to the Department of Cooperatives within this Ministry
With-assistance from NRECA the PDO-RE was organized and staffed for
three basic functions Organization of RECs and personnel training
budgeting andcontrol of loan funds for the RECs technical assistanrA
for engineering materialequipment procurement and construction
During the period 1978 to the end of 1984 USAIDs PACO personnel
complement varied from thirty (30) to sixty (60) persons and refinements
were made in-organizational structure
As with most new agencies time was required before thePDO-RE began
to function effectively The two major problems were minimal authority
in decision-making within the GOI framework and low salaries resulting
in a high personnel turnover
By USAIDs PACDI PDO-RE had developed key personnel in the accounting
and technical departments to provide continuing assistance to the RECs
Administrative functions within the PO-RE were performed efficiently
and requests for assistance in the development of additional rural
electrification projects were being processed
6
PROJECT FUNDING
Loan funds for the RECs were from two sources USAIDs commodity loan
and GOIs counterpart loan Originally the Canadian Government
through their international development agency approved a loan to fund
the power supply components of the project but this was not utilized
TheUSAID loan was in the amount of ten million dollars ($10000000)
divided between the three RECs Loan terms included two percent (2)
interest during theten year grace period-and three percent (3)
interest during the twenty year amortization period (30 year loan)
The GOI loan totalled the 1978 rupiah equivalent of $14402000 US
dollars which due to devaluation was only the equivalent of $5400000
US dollars at the time of the PACD Loan terms limited the grace
period to six years with a fourteen year amortization period (20 year
loan) The interest rate was set at six percent (6)
To identify and commit the end-user of these loan funds re-loan
agreements were executed between the GOI Bank Rakyat Indonesia (BRI)
and the three RECs PO0-RE and NRECA staff provided recommendations
on division of the loans between the three RECs using feasibilityshy
study projections as the basis for division Re-loan agreements
included the addition of six-tenths of one percent (6) service charge
for BRI raising the interest on the US dollar loan to 26 during
the grace period 36 during the amortization period and raising
interest on the GOI loan to 66
Both the USAID and GOI provided grant funds to develope the RECs
The USAID grant expenditures at the PACD were approximately six million
five hundred thousand $6500O00)dollars which was primarily for
architecture and engineering-consultants and organization-managementshy
training consultants
The GOI grant as stipulatedin the USAID-GOI loan was listed as the
rupiah equivalent of one million three hundred and fifteen thousand
($1315000)dollars forconsultant support Inaddition rupiah funds
were made available to svuport thePDO-RE andthe RECsfrom the GOIs
annual budget (DIP funds) At the PACD approximately Rp 4700000000
rupiah hadbeen expended for all purposes Thedollar equivalent
which is difficult to estimate due to drastic changes in rupiah-dollar
conversion rates may approximate $5700000
REC ORGANIZATIONAND DEVELOPMENT
ThePDORE and NRECA staff-assisted bylocal DGC staff conductea
information meetings in the three REC areas beginning inJanuary of
1979 This activity was followed by artual organization of eachREC
adoption of bylaws and election of directors By-April 1979 the
organizationphase of REC development had been completed
Temporary-offices were established within each REC area in 1979
lermanent headquarters facilities which included an office building
md a warehouse were completed and odcupied in 19831984
During the pre-construction period a small staff of about six people
was employed at each kEC When membership solicitation began and RE demonstration project construction started employee complement inshy
creased substantially
Listed below are statistics relating to the RECs servir areas and
organizationas of the PACD
KECAMATAN DESAS BOARD MEMBERS EMPLOYEES
Lampung 9 109 5 8i
Lombok 5 29 7 46
Luwu 5 51 9 76
MANAGEMENT
After organization a local DGC representative served as ProjectCoorshy
dinator and controller of GOI grant funds and also served as REC
Acting Manager Bythe end of 1980 PDO-RE had appointedan acting
manager for each REC from PDO-RE staff
Ironically at the PACD management was again by coordinator-manager
dual rolL at the Luwu REC and planswere being made to appoint the
Acting Manager as Coordinator at the Lombok REC As the RECs grow and
accept greater financial responsibilities with their own capital the
role of the Coordinator is diminishing Eventually as grant funding
is phased out the Coordinators position will be abolished and Managers
will be appointed on a permanent basis
9
TRAINING
The greatest activity for the NRECA OMT team was TRAINING -------shy
both formal class room training ---- and on-the-job training
Key employees of the PDO-RE first received training in the Philippines
with the Philippines National Electrification Administration (NEA)
Seven persons spent two weeks in the Philippines in 1978where NEA and
NRECA staff conducted training courses Later that year two key NEA
staff members came to Indonesia and assisted NRECA with first-stage
training for PDO-RE staff
The position of NRECA training officer in Indonesia was filled in Janushy
ary of 1979 and remained occupied until March of 1984 PDO-RE had a
full-time training officer from late 1979 until his unfortunate death
in early 1984 As of the PACD PDO-REstraining officer position
remained vacant
Under the heading of formal training PDO-RE and NRECA conducted 51
training courses A total of 535 persons participatedin the courses
many of whom attended two or more courses (See pages 10-13)
Training materials included a comprehensive Accounting Procedures
Manual Work Flow Manuals and numerous training materials on individual
subjects Unfortunately much of the NRECAPDO-RE training material
was lost in-November of 1984 when theSarinah office building was desshy
troyed by fire Key manuals were reconstructed from training materials
which had been distributed to the RECsprior to the fire
))
10 TRAINING COURSES
I COURSES HELD INJAKARTA
NUMBER OFCOURSE TITLE DATES HELD PARTICIPANTS
1 Project Orientation-planning April 4 -7th 1979 15 (PDO-RE staff)
2 Rural Member Service Specialists June 6 -11th1979 12 (Member Sdrvices Dept personnel)
3 Bookkeepers Training Course Nov 5 - 13th 1979 14
4 Electrical Genset Operation amp Nov 26 - Dec 1979 4 Maintenance
5 Accounting Reporting Dec 13 - 26th 1982 12
6 Pole Inspection Feb7 - lbth 1983 6
I COURSESHELD AT THE LAMPUNG REC
1 Management Seminar I May 2 - 5th 1979 8
2 Management Training Course II Oct 4 -6th 1979 10
3 Accounting Workshop Nov 24 - 29th 1980 6
4 Apprentice Linemen Feb9 -18th 1981 18 Training Course
5 Electrician Training Course Feb 12 19th 1981 9
6 Kwh Meter Meter Entrance April 22 10-23rd1981
Workshop
7 Construction Cost April 25 -May 1- 1981 9 Accounting II
8 Distribution System Operation May 29 -30th 1981 26 amp Maintenance
9 Meter Reading Billing June 16- 17th1981 9 Collection
11
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
10 Power Plant Recording and Reporting June 6181981 Workshop
11 AccountingReportingoperating June 19 21$-1981 5 Period
12 Cooperative Work Flow Procedure --March22 - 31st 1982 15
13 Engineering Procedure Rural June 14 shy 18th 1982- 7 Distribution System
14 Kwh Meter Testing 8March12 - 19th 1984
III COURSES HELD ATTHE LOMBOK REC NUMBER OF
COURSE TITLE DATES HELD PARTICIPANTS
1 Management Seminar may 21 24th 1979 9
2 Management Training Course II Sept24 26t 1979 - 11
3 Electrician-Trainors Training Course -Nov 5 l0th1979 3
4 ElectricianTraining Course Nov12 17th 1979 14
5 Electric Genset Operation amp Nov 26 - Dec 1 1979 4
Maintenance
6 Construction Material Management March 10 -15th 1980 6 and Construction Cost Accounting
7 Apprentice Linemen Training April7- 9th 1980 9 Course bull 28 - 30th 1980
May 1 - 10th 1980
8 Staff Oripn+a+4nn June 23rd 1980 9
12
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
9 Meter Reading Billing and June 24 - 25th 1980 6
Col lecting
10 Power Plant Operation amp Maintenance July 21- 26th- 1980 6
11 Distribution System Operation June 26 28th 1980 Aug 4 -
-
5th 1980and Maintenance
12 Safety and 12 First Aid Training July 21- 30th 1980
13 Staff OrientationSeminar Sep 29 Oct 41980 5
14 Power Plant Recording Oct 1 - 2nd 1980 8
15 Accounting Workshop Nov 24 - 29th 1980
16 Service Drops Service Entrance July 14 15th 1981 12
17 Cooperative Work Flow Procedure I shy-Eeb 1 4th 1982 12
18 CooperativeWprk FlowProcedure II April 28- May1st 1982 14
IV COURSES HELD AT LUWU REC
1 Management Seminar I May9- 12th 1979 8
2 Management Training Course II Oct 11 - 13th 1980 8
3 Electrician Training Course May 4 - 9th 1981 12
4 Linemen Training Course May 4- 25th 1981 12
5 Materials Management amp Housewlring May 18 - 19th 1981 9
gt1
13
NUMBER OF COURSE TITLE DATES HELD PARTICIPANT
6 Construction Cost Accounting 9May 19 - 23rd 1981
7 Meter Reading Billing and 13August 21 1981
Collection
8 Distribution System Oparation anc 23Aug 24- 25th 1981
Maintenance
9 Safety Procedures -August 25 1981 23
10 Service Drops and Staking Sheets August 261981 8
11 Cooperative Manaaement Wnrkqhnn 5August 27th 1981
12 Cooperative Workflow Procedure March 1 6th 1982 12
13 Safety Trainini January 21 -26 1923 24
RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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PROJECT DEVELOPMENT OFFICE FOR RURAL ELECTRIFICATION
I
As a condition precedent to release of US dollar loan funds a Project
Development Office for Rural Electrification (PDO-RE) was formed in
calendar year 1978 Originally the PDO-RE was directly under the office
of the Direptor General of Cooperatives but in 1983 when the GOI formed
a separate Ministry ofCooperatives PDb-REs reporting relationship
shifted to the Department of Cooperatives within this Ministry
With-assistance from NRECA the PDO-RE was organized and staffed for
three basic functions Organization of RECs and personnel training
budgeting andcontrol of loan funds for the RECs technical assistanrA
for engineering materialequipment procurement and construction
During the period 1978 to the end of 1984 USAIDs PACO personnel
complement varied from thirty (30) to sixty (60) persons and refinements
were made in-organizational structure
As with most new agencies time was required before thePDO-RE began
to function effectively The two major problems were minimal authority
in decision-making within the GOI framework and low salaries resulting
in a high personnel turnover
By USAIDs PACDI PDO-RE had developed key personnel in the accounting
and technical departments to provide continuing assistance to the RECs
Administrative functions within the PO-RE were performed efficiently
and requests for assistance in the development of additional rural
electrification projects were being processed
6
PROJECT FUNDING
Loan funds for the RECs were from two sources USAIDs commodity loan
and GOIs counterpart loan Originally the Canadian Government
through their international development agency approved a loan to fund
the power supply components of the project but this was not utilized
TheUSAID loan was in the amount of ten million dollars ($10000000)
divided between the three RECs Loan terms included two percent (2)
interest during theten year grace period-and three percent (3)
interest during the twenty year amortization period (30 year loan)
The GOI loan totalled the 1978 rupiah equivalent of $14402000 US
dollars which due to devaluation was only the equivalent of $5400000
US dollars at the time of the PACD Loan terms limited the grace
period to six years with a fourteen year amortization period (20 year
loan) The interest rate was set at six percent (6)
To identify and commit the end-user of these loan funds re-loan
agreements were executed between the GOI Bank Rakyat Indonesia (BRI)
and the three RECs PO0-RE and NRECA staff provided recommendations
on division of the loans between the three RECs using feasibilityshy
study projections as the basis for division Re-loan agreements
included the addition of six-tenths of one percent (6) service charge
for BRI raising the interest on the US dollar loan to 26 during
the grace period 36 during the amortization period and raising
interest on the GOI loan to 66
Both the USAID and GOI provided grant funds to develope the RECs
The USAID grant expenditures at the PACD were approximately six million
five hundred thousand $6500O00)dollars which was primarily for
architecture and engineering-consultants and organization-managementshy
training consultants
The GOI grant as stipulatedin the USAID-GOI loan was listed as the
rupiah equivalent of one million three hundred and fifteen thousand
($1315000)dollars forconsultant support Inaddition rupiah funds
were made available to svuport thePDO-RE andthe RECsfrom the GOIs
annual budget (DIP funds) At the PACD approximately Rp 4700000000
rupiah hadbeen expended for all purposes Thedollar equivalent
which is difficult to estimate due to drastic changes in rupiah-dollar
conversion rates may approximate $5700000
REC ORGANIZATIONAND DEVELOPMENT
ThePDORE and NRECA staff-assisted bylocal DGC staff conductea
information meetings in the three REC areas beginning inJanuary of
1979 This activity was followed by artual organization of eachREC
adoption of bylaws and election of directors By-April 1979 the
organizationphase of REC development had been completed
Temporary-offices were established within each REC area in 1979
lermanent headquarters facilities which included an office building
md a warehouse were completed and odcupied in 19831984
During the pre-construction period a small staff of about six people
was employed at each kEC When membership solicitation began and RE demonstration project construction started employee complement inshy
creased substantially
Listed below are statistics relating to the RECs servir areas and
organizationas of the PACD
KECAMATAN DESAS BOARD MEMBERS EMPLOYEES
Lampung 9 109 5 8i
Lombok 5 29 7 46
Luwu 5 51 9 76
MANAGEMENT
After organization a local DGC representative served as ProjectCoorshy
dinator and controller of GOI grant funds and also served as REC
Acting Manager Bythe end of 1980 PDO-RE had appointedan acting
manager for each REC from PDO-RE staff
Ironically at the PACD management was again by coordinator-manager
dual rolL at the Luwu REC and planswere being made to appoint the
Acting Manager as Coordinator at the Lombok REC As the RECs grow and
accept greater financial responsibilities with their own capital the
role of the Coordinator is diminishing Eventually as grant funding
is phased out the Coordinators position will be abolished and Managers
will be appointed on a permanent basis
9
TRAINING
The greatest activity for the NRECA OMT team was TRAINING -------shy
both formal class room training ---- and on-the-job training
Key employees of the PDO-RE first received training in the Philippines
with the Philippines National Electrification Administration (NEA)
Seven persons spent two weeks in the Philippines in 1978where NEA and
NRECA staff conducted training courses Later that year two key NEA
staff members came to Indonesia and assisted NRECA with first-stage
training for PDO-RE staff
The position of NRECA training officer in Indonesia was filled in Janushy
ary of 1979 and remained occupied until March of 1984 PDO-RE had a
full-time training officer from late 1979 until his unfortunate death
in early 1984 As of the PACD PDO-REstraining officer position
remained vacant
Under the heading of formal training PDO-RE and NRECA conducted 51
training courses A total of 535 persons participatedin the courses
many of whom attended two or more courses (See pages 10-13)
Training materials included a comprehensive Accounting Procedures
Manual Work Flow Manuals and numerous training materials on individual
subjects Unfortunately much of the NRECAPDO-RE training material
was lost in-November of 1984 when theSarinah office building was desshy
troyed by fire Key manuals were reconstructed from training materials
which had been distributed to the RECsprior to the fire
))
10 TRAINING COURSES
I COURSES HELD INJAKARTA
NUMBER OFCOURSE TITLE DATES HELD PARTICIPANTS
1 Project Orientation-planning April 4 -7th 1979 15 (PDO-RE staff)
2 Rural Member Service Specialists June 6 -11th1979 12 (Member Sdrvices Dept personnel)
3 Bookkeepers Training Course Nov 5 - 13th 1979 14
4 Electrical Genset Operation amp Nov 26 - Dec 1979 4 Maintenance
5 Accounting Reporting Dec 13 - 26th 1982 12
6 Pole Inspection Feb7 - lbth 1983 6
I COURSESHELD AT THE LAMPUNG REC
1 Management Seminar I May 2 - 5th 1979 8
2 Management Training Course II Oct 4 -6th 1979 10
3 Accounting Workshop Nov 24 - 29th 1980 6
4 Apprentice Linemen Feb9 -18th 1981 18 Training Course
5 Electrician Training Course Feb 12 19th 1981 9
6 Kwh Meter Meter Entrance April 22 10-23rd1981
Workshop
7 Construction Cost April 25 -May 1- 1981 9 Accounting II
8 Distribution System Operation May 29 -30th 1981 26 amp Maintenance
9 Meter Reading Billing June 16- 17th1981 9 Collection
11
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
10 Power Plant Recording and Reporting June 6181981 Workshop
11 AccountingReportingoperating June 19 21$-1981 5 Period
12 Cooperative Work Flow Procedure --March22 - 31st 1982 15
13 Engineering Procedure Rural June 14 shy 18th 1982- 7 Distribution System
14 Kwh Meter Testing 8March12 - 19th 1984
III COURSES HELD ATTHE LOMBOK REC NUMBER OF
COURSE TITLE DATES HELD PARTICIPANTS
1 Management Seminar may 21 24th 1979 9
2 Management Training Course II Sept24 26t 1979 - 11
3 Electrician-Trainors Training Course -Nov 5 l0th1979 3
4 ElectricianTraining Course Nov12 17th 1979 14
5 Electric Genset Operation amp Nov 26 - Dec 1 1979 4
Maintenance
6 Construction Material Management March 10 -15th 1980 6 and Construction Cost Accounting
7 Apprentice Linemen Training April7- 9th 1980 9 Course bull 28 - 30th 1980
May 1 - 10th 1980
8 Staff Oripn+a+4nn June 23rd 1980 9
12
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
9 Meter Reading Billing and June 24 - 25th 1980 6
Col lecting
10 Power Plant Operation amp Maintenance July 21- 26th- 1980 6
11 Distribution System Operation June 26 28th 1980 Aug 4 -
-
5th 1980and Maintenance
12 Safety and 12 First Aid Training July 21- 30th 1980
13 Staff OrientationSeminar Sep 29 Oct 41980 5
14 Power Plant Recording Oct 1 - 2nd 1980 8
15 Accounting Workshop Nov 24 - 29th 1980
16 Service Drops Service Entrance July 14 15th 1981 12
17 Cooperative Work Flow Procedure I shy-Eeb 1 4th 1982 12
18 CooperativeWprk FlowProcedure II April 28- May1st 1982 14
IV COURSES HELD AT LUWU REC
1 Management Seminar I May9- 12th 1979 8
2 Management Training Course II Oct 11 - 13th 1980 8
3 Electrician Training Course May 4 - 9th 1981 12
4 Linemen Training Course May 4- 25th 1981 12
5 Materials Management amp Housewlring May 18 - 19th 1981 9
gt1
13
NUMBER OF COURSE TITLE DATES HELD PARTICIPANT
6 Construction Cost Accounting 9May 19 - 23rd 1981
7 Meter Reading Billing and 13August 21 1981
Collection
8 Distribution System Oparation anc 23Aug 24- 25th 1981
Maintenance
9 Safety Procedures -August 25 1981 23
10 Service Drops and Staking Sheets August 261981 8
11 Cooperative Manaaement Wnrkqhnn 5August 27th 1981
12 Cooperative Workflow Procedure March 1 6th 1982 12
13 Safety Trainini January 21 -26 1923 24
RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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6
PROJECT FUNDING
Loan funds for the RECs were from two sources USAIDs commodity loan
and GOIs counterpart loan Originally the Canadian Government
through their international development agency approved a loan to fund
the power supply components of the project but this was not utilized
TheUSAID loan was in the amount of ten million dollars ($10000000)
divided between the three RECs Loan terms included two percent (2)
interest during theten year grace period-and three percent (3)
interest during the twenty year amortization period (30 year loan)
The GOI loan totalled the 1978 rupiah equivalent of $14402000 US
dollars which due to devaluation was only the equivalent of $5400000
US dollars at the time of the PACD Loan terms limited the grace
period to six years with a fourteen year amortization period (20 year
loan) The interest rate was set at six percent (6)
To identify and commit the end-user of these loan funds re-loan
agreements were executed between the GOI Bank Rakyat Indonesia (BRI)
and the three RECs PO0-RE and NRECA staff provided recommendations
on division of the loans between the three RECs using feasibilityshy
study projections as the basis for division Re-loan agreements
included the addition of six-tenths of one percent (6) service charge
for BRI raising the interest on the US dollar loan to 26 during
the grace period 36 during the amortization period and raising
interest on the GOI loan to 66
Both the USAID and GOI provided grant funds to develope the RECs
The USAID grant expenditures at the PACD were approximately six million
five hundred thousand $6500O00)dollars which was primarily for
architecture and engineering-consultants and organization-managementshy
training consultants
The GOI grant as stipulatedin the USAID-GOI loan was listed as the
rupiah equivalent of one million three hundred and fifteen thousand
($1315000)dollars forconsultant support Inaddition rupiah funds
were made available to svuport thePDO-RE andthe RECsfrom the GOIs
annual budget (DIP funds) At the PACD approximately Rp 4700000000
rupiah hadbeen expended for all purposes Thedollar equivalent
which is difficult to estimate due to drastic changes in rupiah-dollar
conversion rates may approximate $5700000
REC ORGANIZATIONAND DEVELOPMENT
ThePDORE and NRECA staff-assisted bylocal DGC staff conductea
information meetings in the three REC areas beginning inJanuary of
1979 This activity was followed by artual organization of eachREC
adoption of bylaws and election of directors By-April 1979 the
organizationphase of REC development had been completed
Temporary-offices were established within each REC area in 1979
lermanent headquarters facilities which included an office building
md a warehouse were completed and odcupied in 19831984
During the pre-construction period a small staff of about six people
was employed at each kEC When membership solicitation began and RE demonstration project construction started employee complement inshy
creased substantially
Listed below are statistics relating to the RECs servir areas and
organizationas of the PACD
KECAMATAN DESAS BOARD MEMBERS EMPLOYEES
Lampung 9 109 5 8i
Lombok 5 29 7 46
Luwu 5 51 9 76
MANAGEMENT
After organization a local DGC representative served as ProjectCoorshy
dinator and controller of GOI grant funds and also served as REC
Acting Manager Bythe end of 1980 PDO-RE had appointedan acting
manager for each REC from PDO-RE staff
Ironically at the PACD management was again by coordinator-manager
dual rolL at the Luwu REC and planswere being made to appoint the
Acting Manager as Coordinator at the Lombok REC As the RECs grow and
accept greater financial responsibilities with their own capital the
role of the Coordinator is diminishing Eventually as grant funding
is phased out the Coordinators position will be abolished and Managers
will be appointed on a permanent basis
9
TRAINING
The greatest activity for the NRECA OMT team was TRAINING -------shy
both formal class room training ---- and on-the-job training
Key employees of the PDO-RE first received training in the Philippines
with the Philippines National Electrification Administration (NEA)
Seven persons spent two weeks in the Philippines in 1978where NEA and
NRECA staff conducted training courses Later that year two key NEA
staff members came to Indonesia and assisted NRECA with first-stage
training for PDO-RE staff
The position of NRECA training officer in Indonesia was filled in Janushy
ary of 1979 and remained occupied until March of 1984 PDO-RE had a
full-time training officer from late 1979 until his unfortunate death
in early 1984 As of the PACD PDO-REstraining officer position
remained vacant
Under the heading of formal training PDO-RE and NRECA conducted 51
training courses A total of 535 persons participatedin the courses
many of whom attended two or more courses (See pages 10-13)
Training materials included a comprehensive Accounting Procedures
Manual Work Flow Manuals and numerous training materials on individual
subjects Unfortunately much of the NRECAPDO-RE training material
was lost in-November of 1984 when theSarinah office building was desshy
troyed by fire Key manuals were reconstructed from training materials
which had been distributed to the RECsprior to the fire
))
10 TRAINING COURSES
I COURSES HELD INJAKARTA
NUMBER OFCOURSE TITLE DATES HELD PARTICIPANTS
1 Project Orientation-planning April 4 -7th 1979 15 (PDO-RE staff)
2 Rural Member Service Specialists June 6 -11th1979 12 (Member Sdrvices Dept personnel)
3 Bookkeepers Training Course Nov 5 - 13th 1979 14
4 Electrical Genset Operation amp Nov 26 - Dec 1979 4 Maintenance
5 Accounting Reporting Dec 13 - 26th 1982 12
6 Pole Inspection Feb7 - lbth 1983 6
I COURSESHELD AT THE LAMPUNG REC
1 Management Seminar I May 2 - 5th 1979 8
2 Management Training Course II Oct 4 -6th 1979 10
3 Accounting Workshop Nov 24 - 29th 1980 6
4 Apprentice Linemen Feb9 -18th 1981 18 Training Course
5 Electrician Training Course Feb 12 19th 1981 9
6 Kwh Meter Meter Entrance April 22 10-23rd1981
Workshop
7 Construction Cost April 25 -May 1- 1981 9 Accounting II
8 Distribution System Operation May 29 -30th 1981 26 amp Maintenance
9 Meter Reading Billing June 16- 17th1981 9 Collection
11
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
10 Power Plant Recording and Reporting June 6181981 Workshop
11 AccountingReportingoperating June 19 21$-1981 5 Period
12 Cooperative Work Flow Procedure --March22 - 31st 1982 15
13 Engineering Procedure Rural June 14 shy 18th 1982- 7 Distribution System
14 Kwh Meter Testing 8March12 - 19th 1984
III COURSES HELD ATTHE LOMBOK REC NUMBER OF
COURSE TITLE DATES HELD PARTICIPANTS
1 Management Seminar may 21 24th 1979 9
2 Management Training Course II Sept24 26t 1979 - 11
3 Electrician-Trainors Training Course -Nov 5 l0th1979 3
4 ElectricianTraining Course Nov12 17th 1979 14
5 Electric Genset Operation amp Nov 26 - Dec 1 1979 4
Maintenance
6 Construction Material Management March 10 -15th 1980 6 and Construction Cost Accounting
7 Apprentice Linemen Training April7- 9th 1980 9 Course bull 28 - 30th 1980
May 1 - 10th 1980
8 Staff Oripn+a+4nn June 23rd 1980 9
12
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
9 Meter Reading Billing and June 24 - 25th 1980 6
Col lecting
10 Power Plant Operation amp Maintenance July 21- 26th- 1980 6
11 Distribution System Operation June 26 28th 1980 Aug 4 -
-
5th 1980and Maintenance
12 Safety and 12 First Aid Training July 21- 30th 1980
13 Staff OrientationSeminar Sep 29 Oct 41980 5
14 Power Plant Recording Oct 1 - 2nd 1980 8
15 Accounting Workshop Nov 24 - 29th 1980
16 Service Drops Service Entrance July 14 15th 1981 12
17 Cooperative Work Flow Procedure I shy-Eeb 1 4th 1982 12
18 CooperativeWprk FlowProcedure II April 28- May1st 1982 14
IV COURSES HELD AT LUWU REC
1 Management Seminar I May9- 12th 1979 8
2 Management Training Course II Oct 11 - 13th 1980 8
3 Electrician Training Course May 4 - 9th 1981 12
4 Linemen Training Course May 4- 25th 1981 12
5 Materials Management amp Housewlring May 18 - 19th 1981 9
gt1
13
NUMBER OF COURSE TITLE DATES HELD PARTICIPANT
6 Construction Cost Accounting 9May 19 - 23rd 1981
7 Meter Reading Billing and 13August 21 1981
Collection
8 Distribution System Oparation anc 23Aug 24- 25th 1981
Maintenance
9 Safety Procedures -August 25 1981 23
10 Service Drops and Staking Sheets August 261981 8
11 Cooperative Manaaement Wnrkqhnn 5August 27th 1981
12 Cooperative Workflow Procedure March 1 6th 1982 12
13 Safety Trainini January 21 -26 1923 24
RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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36
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2 TOALK=IN (19pl 21) (2966024) (319232) (13054863) 275842 (3641755) (3100044) (3960901 (05 31 ( 60477(01031) (1430076) 774000) nr 2071500 201500 00 C00 2446-00 0 44S100 2420097Oo 0 94625 11Co4520 4 2717400 242000 01S0
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1804 17261 16286 201 JS3061 2086
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2673 3311100 27
2 170 OU 160 060 00106- 1i Aerg1 m -n per rA billed is_1
01 125 _ is_0_ii11
20 60 rso 00 coeptI per 1 s -e r
Both the USAID and GOI provided grant funds to develope the RECs
The USAID grant expenditures at the PACD were approximately six million
five hundred thousand $6500O00)dollars which was primarily for
architecture and engineering-consultants and organization-managementshy
training consultants
The GOI grant as stipulatedin the USAID-GOI loan was listed as the
rupiah equivalent of one million three hundred and fifteen thousand
($1315000)dollars forconsultant support Inaddition rupiah funds
were made available to svuport thePDO-RE andthe RECsfrom the GOIs
annual budget (DIP funds) At the PACD approximately Rp 4700000000
rupiah hadbeen expended for all purposes Thedollar equivalent
which is difficult to estimate due to drastic changes in rupiah-dollar
conversion rates may approximate $5700000
REC ORGANIZATIONAND DEVELOPMENT
ThePDORE and NRECA staff-assisted bylocal DGC staff conductea
information meetings in the three REC areas beginning inJanuary of
1979 This activity was followed by artual organization of eachREC
adoption of bylaws and election of directors By-April 1979 the
organizationphase of REC development had been completed
Temporary-offices were established within each REC area in 1979
lermanent headquarters facilities which included an office building
md a warehouse were completed and odcupied in 19831984
During the pre-construction period a small staff of about six people
was employed at each kEC When membership solicitation began and RE demonstration project construction started employee complement inshy
creased substantially
Listed below are statistics relating to the RECs servir areas and
organizationas of the PACD
KECAMATAN DESAS BOARD MEMBERS EMPLOYEES
Lampung 9 109 5 8i
Lombok 5 29 7 46
Luwu 5 51 9 76
MANAGEMENT
After organization a local DGC representative served as ProjectCoorshy
dinator and controller of GOI grant funds and also served as REC
Acting Manager Bythe end of 1980 PDO-RE had appointedan acting
manager for each REC from PDO-RE staff
Ironically at the PACD management was again by coordinator-manager
dual rolL at the Luwu REC and planswere being made to appoint the
Acting Manager as Coordinator at the Lombok REC As the RECs grow and
accept greater financial responsibilities with their own capital the
role of the Coordinator is diminishing Eventually as grant funding
is phased out the Coordinators position will be abolished and Managers
will be appointed on a permanent basis
9
TRAINING
The greatest activity for the NRECA OMT team was TRAINING -------shy
both formal class room training ---- and on-the-job training
Key employees of the PDO-RE first received training in the Philippines
with the Philippines National Electrification Administration (NEA)
Seven persons spent two weeks in the Philippines in 1978where NEA and
NRECA staff conducted training courses Later that year two key NEA
staff members came to Indonesia and assisted NRECA with first-stage
training for PDO-RE staff
The position of NRECA training officer in Indonesia was filled in Janushy
ary of 1979 and remained occupied until March of 1984 PDO-RE had a
full-time training officer from late 1979 until his unfortunate death
in early 1984 As of the PACD PDO-REstraining officer position
remained vacant
Under the heading of formal training PDO-RE and NRECA conducted 51
training courses A total of 535 persons participatedin the courses
many of whom attended two or more courses (See pages 10-13)
Training materials included a comprehensive Accounting Procedures
Manual Work Flow Manuals and numerous training materials on individual
subjects Unfortunately much of the NRECAPDO-RE training material
was lost in-November of 1984 when theSarinah office building was desshy
troyed by fire Key manuals were reconstructed from training materials
which had been distributed to the RECsprior to the fire
))
10 TRAINING COURSES
I COURSES HELD INJAKARTA
NUMBER OFCOURSE TITLE DATES HELD PARTICIPANTS
1 Project Orientation-planning April 4 -7th 1979 15 (PDO-RE staff)
2 Rural Member Service Specialists June 6 -11th1979 12 (Member Sdrvices Dept personnel)
3 Bookkeepers Training Course Nov 5 - 13th 1979 14
4 Electrical Genset Operation amp Nov 26 - Dec 1979 4 Maintenance
5 Accounting Reporting Dec 13 - 26th 1982 12
6 Pole Inspection Feb7 - lbth 1983 6
I COURSESHELD AT THE LAMPUNG REC
1 Management Seminar I May 2 - 5th 1979 8
2 Management Training Course II Oct 4 -6th 1979 10
3 Accounting Workshop Nov 24 - 29th 1980 6
4 Apprentice Linemen Feb9 -18th 1981 18 Training Course
5 Electrician Training Course Feb 12 19th 1981 9
6 Kwh Meter Meter Entrance April 22 10-23rd1981
Workshop
7 Construction Cost April 25 -May 1- 1981 9 Accounting II
8 Distribution System Operation May 29 -30th 1981 26 amp Maintenance
9 Meter Reading Billing June 16- 17th1981 9 Collection
11
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
10 Power Plant Recording and Reporting June 6181981 Workshop
11 AccountingReportingoperating June 19 21$-1981 5 Period
12 Cooperative Work Flow Procedure --March22 - 31st 1982 15
13 Engineering Procedure Rural June 14 shy 18th 1982- 7 Distribution System
14 Kwh Meter Testing 8March12 - 19th 1984
III COURSES HELD ATTHE LOMBOK REC NUMBER OF
COURSE TITLE DATES HELD PARTICIPANTS
1 Management Seminar may 21 24th 1979 9
2 Management Training Course II Sept24 26t 1979 - 11
3 Electrician-Trainors Training Course -Nov 5 l0th1979 3
4 ElectricianTraining Course Nov12 17th 1979 14
5 Electric Genset Operation amp Nov 26 - Dec 1 1979 4
Maintenance
6 Construction Material Management March 10 -15th 1980 6 and Construction Cost Accounting
7 Apprentice Linemen Training April7- 9th 1980 9 Course bull 28 - 30th 1980
May 1 - 10th 1980
8 Staff Oripn+a+4nn June 23rd 1980 9
12
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
9 Meter Reading Billing and June 24 - 25th 1980 6
Col lecting
10 Power Plant Operation amp Maintenance July 21- 26th- 1980 6
11 Distribution System Operation June 26 28th 1980 Aug 4 -
-
5th 1980and Maintenance
12 Safety and 12 First Aid Training July 21- 30th 1980
13 Staff OrientationSeminar Sep 29 Oct 41980 5
14 Power Plant Recording Oct 1 - 2nd 1980 8
15 Accounting Workshop Nov 24 - 29th 1980
16 Service Drops Service Entrance July 14 15th 1981 12
17 Cooperative Work Flow Procedure I shy-Eeb 1 4th 1982 12
18 CooperativeWprk FlowProcedure II April 28- May1st 1982 14
IV COURSES HELD AT LUWU REC
1 Management Seminar I May9- 12th 1979 8
2 Management Training Course II Oct 11 - 13th 1980 8
3 Electrician Training Course May 4 - 9th 1981 12
4 Linemen Training Course May 4- 25th 1981 12
5 Materials Management amp Housewlring May 18 - 19th 1981 9
gt1
13
NUMBER OF COURSE TITLE DATES HELD PARTICIPANT
6 Construction Cost Accounting 9May 19 - 23rd 1981
7 Meter Reading Billing and 13August 21 1981
Collection
8 Distribution System Oparation anc 23Aug 24- 25th 1981
Maintenance
9 Safety Procedures -August 25 1981 23
10 Service Drops and Staking Sheets August 261981 8
11 Cooperative Manaaement Wnrkqhnn 5August 27th 1981
12 Cooperative Workflow Procedure March 1 6th 1982 12
13 Safety Trainini January 21 -26 1923 24
RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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36
MI9JKMEOTURA
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During the pre-construction period a small staff of about six people
was employed at each kEC When membership solicitation began and RE demonstration project construction started employee complement inshy
creased substantially
Listed below are statistics relating to the RECs servir areas and
organizationas of the PACD
KECAMATAN DESAS BOARD MEMBERS EMPLOYEES
Lampung 9 109 5 8i
Lombok 5 29 7 46
Luwu 5 51 9 76
MANAGEMENT
After organization a local DGC representative served as ProjectCoorshy
dinator and controller of GOI grant funds and also served as REC
Acting Manager Bythe end of 1980 PDO-RE had appointedan acting
manager for each REC from PDO-RE staff
Ironically at the PACD management was again by coordinator-manager
dual rolL at the Luwu REC and planswere being made to appoint the
Acting Manager as Coordinator at the Lombok REC As the RECs grow and
accept greater financial responsibilities with their own capital the
role of the Coordinator is diminishing Eventually as grant funding
is phased out the Coordinators position will be abolished and Managers
will be appointed on a permanent basis
9
TRAINING
The greatest activity for the NRECA OMT team was TRAINING -------shy
both formal class room training ---- and on-the-job training
Key employees of the PDO-RE first received training in the Philippines
with the Philippines National Electrification Administration (NEA)
Seven persons spent two weeks in the Philippines in 1978where NEA and
NRECA staff conducted training courses Later that year two key NEA
staff members came to Indonesia and assisted NRECA with first-stage
training for PDO-RE staff
The position of NRECA training officer in Indonesia was filled in Janushy
ary of 1979 and remained occupied until March of 1984 PDO-RE had a
full-time training officer from late 1979 until his unfortunate death
in early 1984 As of the PACD PDO-REstraining officer position
remained vacant
Under the heading of formal training PDO-RE and NRECA conducted 51
training courses A total of 535 persons participatedin the courses
many of whom attended two or more courses (See pages 10-13)
Training materials included a comprehensive Accounting Procedures
Manual Work Flow Manuals and numerous training materials on individual
subjects Unfortunately much of the NRECAPDO-RE training material
was lost in-November of 1984 when theSarinah office building was desshy
troyed by fire Key manuals were reconstructed from training materials
which had been distributed to the RECsprior to the fire
))
10 TRAINING COURSES
I COURSES HELD INJAKARTA
NUMBER OFCOURSE TITLE DATES HELD PARTICIPANTS
1 Project Orientation-planning April 4 -7th 1979 15 (PDO-RE staff)
2 Rural Member Service Specialists June 6 -11th1979 12 (Member Sdrvices Dept personnel)
3 Bookkeepers Training Course Nov 5 - 13th 1979 14
4 Electrical Genset Operation amp Nov 26 - Dec 1979 4 Maintenance
5 Accounting Reporting Dec 13 - 26th 1982 12
6 Pole Inspection Feb7 - lbth 1983 6
I COURSESHELD AT THE LAMPUNG REC
1 Management Seminar I May 2 - 5th 1979 8
2 Management Training Course II Oct 4 -6th 1979 10
3 Accounting Workshop Nov 24 - 29th 1980 6
4 Apprentice Linemen Feb9 -18th 1981 18 Training Course
5 Electrician Training Course Feb 12 19th 1981 9
6 Kwh Meter Meter Entrance April 22 10-23rd1981
Workshop
7 Construction Cost April 25 -May 1- 1981 9 Accounting II
8 Distribution System Operation May 29 -30th 1981 26 amp Maintenance
9 Meter Reading Billing June 16- 17th1981 9 Collection
11
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
10 Power Plant Recording and Reporting June 6181981 Workshop
11 AccountingReportingoperating June 19 21$-1981 5 Period
12 Cooperative Work Flow Procedure --March22 - 31st 1982 15
13 Engineering Procedure Rural June 14 shy 18th 1982- 7 Distribution System
14 Kwh Meter Testing 8March12 - 19th 1984
III COURSES HELD ATTHE LOMBOK REC NUMBER OF
COURSE TITLE DATES HELD PARTICIPANTS
1 Management Seminar may 21 24th 1979 9
2 Management Training Course II Sept24 26t 1979 - 11
3 Electrician-Trainors Training Course -Nov 5 l0th1979 3
4 ElectricianTraining Course Nov12 17th 1979 14
5 Electric Genset Operation amp Nov 26 - Dec 1 1979 4
Maintenance
6 Construction Material Management March 10 -15th 1980 6 and Construction Cost Accounting
7 Apprentice Linemen Training April7- 9th 1980 9 Course bull 28 - 30th 1980
May 1 - 10th 1980
8 Staff Oripn+a+4nn June 23rd 1980 9
12
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
9 Meter Reading Billing and June 24 - 25th 1980 6
Col lecting
10 Power Plant Operation amp Maintenance July 21- 26th- 1980 6
11 Distribution System Operation June 26 28th 1980 Aug 4 -
-
5th 1980and Maintenance
12 Safety and 12 First Aid Training July 21- 30th 1980
13 Staff OrientationSeminar Sep 29 Oct 41980 5
14 Power Plant Recording Oct 1 - 2nd 1980 8
15 Accounting Workshop Nov 24 - 29th 1980
16 Service Drops Service Entrance July 14 15th 1981 12
17 Cooperative Work Flow Procedure I shy-Eeb 1 4th 1982 12
18 CooperativeWprk FlowProcedure II April 28- May1st 1982 14
IV COURSES HELD AT LUWU REC
1 Management Seminar I May9- 12th 1979 8
2 Management Training Course II Oct 11 - 13th 1980 8
3 Electrician Training Course May 4 - 9th 1981 12
4 Linemen Training Course May 4- 25th 1981 12
5 Materials Management amp Housewlring May 18 - 19th 1981 9
gt1
13
NUMBER OF COURSE TITLE DATES HELD PARTICIPANT
6 Construction Cost Accounting 9May 19 - 23rd 1981
7 Meter Reading Billing and 13August 21 1981
Collection
8 Distribution System Oparation anc 23Aug 24- 25th 1981
Maintenance
9 Safety Procedures -August 25 1981 23
10 Service Drops and Staking Sheets August 261981 8
11 Cooperative Manaaement Wnrkqhnn 5August 27th 1981
12 Cooperative Workflow Procedure March 1 6th 1982 12
13 Safety Trainini January 21 -26 1923 24
RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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36
MI9JKMEOTURA
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9
TRAINING
The greatest activity for the NRECA OMT team was TRAINING -------shy
both formal class room training ---- and on-the-job training
Key employees of the PDO-RE first received training in the Philippines
with the Philippines National Electrification Administration (NEA)
Seven persons spent two weeks in the Philippines in 1978where NEA and
NRECA staff conducted training courses Later that year two key NEA
staff members came to Indonesia and assisted NRECA with first-stage
training for PDO-RE staff
The position of NRECA training officer in Indonesia was filled in Janushy
ary of 1979 and remained occupied until March of 1984 PDO-RE had a
full-time training officer from late 1979 until his unfortunate death
in early 1984 As of the PACD PDO-REstraining officer position
remained vacant
Under the heading of formal training PDO-RE and NRECA conducted 51
training courses A total of 535 persons participatedin the courses
many of whom attended two or more courses (See pages 10-13)
Training materials included a comprehensive Accounting Procedures
Manual Work Flow Manuals and numerous training materials on individual
subjects Unfortunately much of the NRECAPDO-RE training material
was lost in-November of 1984 when theSarinah office building was desshy
troyed by fire Key manuals were reconstructed from training materials
which had been distributed to the RECsprior to the fire
))
10 TRAINING COURSES
I COURSES HELD INJAKARTA
NUMBER OFCOURSE TITLE DATES HELD PARTICIPANTS
1 Project Orientation-planning April 4 -7th 1979 15 (PDO-RE staff)
2 Rural Member Service Specialists June 6 -11th1979 12 (Member Sdrvices Dept personnel)
3 Bookkeepers Training Course Nov 5 - 13th 1979 14
4 Electrical Genset Operation amp Nov 26 - Dec 1979 4 Maintenance
5 Accounting Reporting Dec 13 - 26th 1982 12
6 Pole Inspection Feb7 - lbth 1983 6
I COURSESHELD AT THE LAMPUNG REC
1 Management Seminar I May 2 - 5th 1979 8
2 Management Training Course II Oct 4 -6th 1979 10
3 Accounting Workshop Nov 24 - 29th 1980 6
4 Apprentice Linemen Feb9 -18th 1981 18 Training Course
5 Electrician Training Course Feb 12 19th 1981 9
6 Kwh Meter Meter Entrance April 22 10-23rd1981
Workshop
7 Construction Cost April 25 -May 1- 1981 9 Accounting II
8 Distribution System Operation May 29 -30th 1981 26 amp Maintenance
9 Meter Reading Billing June 16- 17th1981 9 Collection
11
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
10 Power Plant Recording and Reporting June 6181981 Workshop
11 AccountingReportingoperating June 19 21$-1981 5 Period
12 Cooperative Work Flow Procedure --March22 - 31st 1982 15
13 Engineering Procedure Rural June 14 shy 18th 1982- 7 Distribution System
14 Kwh Meter Testing 8March12 - 19th 1984
III COURSES HELD ATTHE LOMBOK REC NUMBER OF
COURSE TITLE DATES HELD PARTICIPANTS
1 Management Seminar may 21 24th 1979 9
2 Management Training Course II Sept24 26t 1979 - 11
3 Electrician-Trainors Training Course -Nov 5 l0th1979 3
4 ElectricianTraining Course Nov12 17th 1979 14
5 Electric Genset Operation amp Nov 26 - Dec 1 1979 4
Maintenance
6 Construction Material Management March 10 -15th 1980 6 and Construction Cost Accounting
7 Apprentice Linemen Training April7- 9th 1980 9 Course bull 28 - 30th 1980
May 1 - 10th 1980
8 Staff Oripn+a+4nn June 23rd 1980 9
12
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
9 Meter Reading Billing and June 24 - 25th 1980 6
Col lecting
10 Power Plant Operation amp Maintenance July 21- 26th- 1980 6
11 Distribution System Operation June 26 28th 1980 Aug 4 -
-
5th 1980and Maintenance
12 Safety and 12 First Aid Training July 21- 30th 1980
13 Staff OrientationSeminar Sep 29 Oct 41980 5
14 Power Plant Recording Oct 1 - 2nd 1980 8
15 Accounting Workshop Nov 24 - 29th 1980
16 Service Drops Service Entrance July 14 15th 1981 12
17 Cooperative Work Flow Procedure I shy-Eeb 1 4th 1982 12
18 CooperativeWprk FlowProcedure II April 28- May1st 1982 14
IV COURSES HELD AT LUWU REC
1 Management Seminar I May9- 12th 1979 8
2 Management Training Course II Oct 11 - 13th 1980 8
3 Electrician Training Course May 4 - 9th 1981 12
4 Linemen Training Course May 4- 25th 1981 12
5 Materials Management amp Housewlring May 18 - 19th 1981 9
gt1
13
NUMBER OF COURSE TITLE DATES HELD PARTICIPANT
6 Construction Cost Accounting 9May 19 - 23rd 1981
7 Meter Reading Billing and 13August 21 1981
Collection
8 Distribution System Oparation anc 23Aug 24- 25th 1981
Maintenance
9 Safety Procedures -August 25 1981 23
10 Service Drops and Staking Sheets August 261981 8
11 Cooperative Manaaement Wnrkqhnn 5August 27th 1981
12 Cooperative Workflow Procedure March 1 6th 1982 12
13 Safety Trainini January 21 -26 1923 24
RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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36
MI9JKMEOTURA
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10 TRAINING COURSES
I COURSES HELD INJAKARTA
NUMBER OFCOURSE TITLE DATES HELD PARTICIPANTS
1 Project Orientation-planning April 4 -7th 1979 15 (PDO-RE staff)
2 Rural Member Service Specialists June 6 -11th1979 12 (Member Sdrvices Dept personnel)
3 Bookkeepers Training Course Nov 5 - 13th 1979 14
4 Electrical Genset Operation amp Nov 26 - Dec 1979 4 Maintenance
5 Accounting Reporting Dec 13 - 26th 1982 12
6 Pole Inspection Feb7 - lbth 1983 6
I COURSESHELD AT THE LAMPUNG REC
1 Management Seminar I May 2 - 5th 1979 8
2 Management Training Course II Oct 4 -6th 1979 10
3 Accounting Workshop Nov 24 - 29th 1980 6
4 Apprentice Linemen Feb9 -18th 1981 18 Training Course
5 Electrician Training Course Feb 12 19th 1981 9
6 Kwh Meter Meter Entrance April 22 10-23rd1981
Workshop
7 Construction Cost April 25 -May 1- 1981 9 Accounting II
8 Distribution System Operation May 29 -30th 1981 26 amp Maintenance
9 Meter Reading Billing June 16- 17th1981 9 Collection
11
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
10 Power Plant Recording and Reporting June 6181981 Workshop
11 AccountingReportingoperating June 19 21$-1981 5 Period
12 Cooperative Work Flow Procedure --March22 - 31st 1982 15
13 Engineering Procedure Rural June 14 shy 18th 1982- 7 Distribution System
14 Kwh Meter Testing 8March12 - 19th 1984
III COURSES HELD ATTHE LOMBOK REC NUMBER OF
COURSE TITLE DATES HELD PARTICIPANTS
1 Management Seminar may 21 24th 1979 9
2 Management Training Course II Sept24 26t 1979 - 11
3 Electrician-Trainors Training Course -Nov 5 l0th1979 3
4 ElectricianTraining Course Nov12 17th 1979 14
5 Electric Genset Operation amp Nov 26 - Dec 1 1979 4
Maintenance
6 Construction Material Management March 10 -15th 1980 6 and Construction Cost Accounting
7 Apprentice Linemen Training April7- 9th 1980 9 Course bull 28 - 30th 1980
May 1 - 10th 1980
8 Staff Oripn+a+4nn June 23rd 1980 9
12
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
9 Meter Reading Billing and June 24 - 25th 1980 6
Col lecting
10 Power Plant Operation amp Maintenance July 21- 26th- 1980 6
11 Distribution System Operation June 26 28th 1980 Aug 4 -
-
5th 1980and Maintenance
12 Safety and 12 First Aid Training July 21- 30th 1980
13 Staff OrientationSeminar Sep 29 Oct 41980 5
14 Power Plant Recording Oct 1 - 2nd 1980 8
15 Accounting Workshop Nov 24 - 29th 1980
16 Service Drops Service Entrance July 14 15th 1981 12
17 Cooperative Work Flow Procedure I shy-Eeb 1 4th 1982 12
18 CooperativeWprk FlowProcedure II April 28- May1st 1982 14
IV COURSES HELD AT LUWU REC
1 Management Seminar I May9- 12th 1979 8
2 Management Training Course II Oct 11 - 13th 1980 8
3 Electrician Training Course May 4 - 9th 1981 12
4 Linemen Training Course May 4- 25th 1981 12
5 Materials Management amp Housewlring May 18 - 19th 1981 9
gt1
13
NUMBER OF COURSE TITLE DATES HELD PARTICIPANT
6 Construction Cost Accounting 9May 19 - 23rd 1981
7 Meter Reading Billing and 13August 21 1981
Collection
8 Distribution System Oparation anc 23Aug 24- 25th 1981
Maintenance
9 Safety Procedures -August 25 1981 23
10 Service Drops and Staking Sheets August 261981 8
11 Cooperative Manaaement Wnrkqhnn 5August 27th 1981
12 Cooperative Workflow Procedure March 1 6th 1982 12
13 Safety Trainini January 21 -26 1923 24
RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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11
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
10 Power Plant Recording and Reporting June 6181981 Workshop
11 AccountingReportingoperating June 19 21$-1981 5 Period
12 Cooperative Work Flow Procedure --March22 - 31st 1982 15
13 Engineering Procedure Rural June 14 shy 18th 1982- 7 Distribution System
14 Kwh Meter Testing 8March12 - 19th 1984
III COURSES HELD ATTHE LOMBOK REC NUMBER OF
COURSE TITLE DATES HELD PARTICIPANTS
1 Management Seminar may 21 24th 1979 9
2 Management Training Course II Sept24 26t 1979 - 11
3 Electrician-Trainors Training Course -Nov 5 l0th1979 3
4 ElectricianTraining Course Nov12 17th 1979 14
5 Electric Genset Operation amp Nov 26 - Dec 1 1979 4
Maintenance
6 Construction Material Management March 10 -15th 1980 6 and Construction Cost Accounting
7 Apprentice Linemen Training April7- 9th 1980 9 Course bull 28 - 30th 1980
May 1 - 10th 1980
8 Staff Oripn+a+4nn June 23rd 1980 9
12
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
9 Meter Reading Billing and June 24 - 25th 1980 6
Col lecting
10 Power Plant Operation amp Maintenance July 21- 26th- 1980 6
11 Distribution System Operation June 26 28th 1980 Aug 4 -
-
5th 1980and Maintenance
12 Safety and 12 First Aid Training July 21- 30th 1980
13 Staff OrientationSeminar Sep 29 Oct 41980 5
14 Power Plant Recording Oct 1 - 2nd 1980 8
15 Accounting Workshop Nov 24 - 29th 1980
16 Service Drops Service Entrance July 14 15th 1981 12
17 Cooperative Work Flow Procedure I shy-Eeb 1 4th 1982 12
18 CooperativeWprk FlowProcedure II April 28- May1st 1982 14
IV COURSES HELD AT LUWU REC
1 Management Seminar I May9- 12th 1979 8
2 Management Training Course II Oct 11 - 13th 1980 8
3 Electrician Training Course May 4 - 9th 1981 12
4 Linemen Training Course May 4- 25th 1981 12
5 Materials Management amp Housewlring May 18 - 19th 1981 9
gt1
13
NUMBER OF COURSE TITLE DATES HELD PARTICIPANT
6 Construction Cost Accounting 9May 19 - 23rd 1981
7 Meter Reading Billing and 13August 21 1981
Collection
8 Distribution System Oparation anc 23Aug 24- 25th 1981
Maintenance
9 Safety Procedures -August 25 1981 23
10 Service Drops and Staking Sheets August 261981 8
11 Cooperative Manaaement Wnrkqhnn 5August 27th 1981
12 Cooperative Workflow Procedure March 1 6th 1982 12
13 Safety Trainini January 21 -26 1923 24
RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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12
NUMBER OF COURSE TITLE DATES HELD PARTICIPANTS
9 Meter Reading Billing and June 24 - 25th 1980 6
Col lecting
10 Power Plant Operation amp Maintenance July 21- 26th- 1980 6
11 Distribution System Operation June 26 28th 1980 Aug 4 -
-
5th 1980and Maintenance
12 Safety and 12 First Aid Training July 21- 30th 1980
13 Staff OrientationSeminar Sep 29 Oct 41980 5
14 Power Plant Recording Oct 1 - 2nd 1980 8
15 Accounting Workshop Nov 24 - 29th 1980
16 Service Drops Service Entrance July 14 15th 1981 12
17 Cooperative Work Flow Procedure I shy-Eeb 1 4th 1982 12
18 CooperativeWprk FlowProcedure II April 28- May1st 1982 14
IV COURSES HELD AT LUWU REC
1 Management Seminar I May9- 12th 1979 8
2 Management Training Course II Oct 11 - 13th 1980 8
3 Electrician Training Course May 4 - 9th 1981 12
4 Linemen Training Course May 4- 25th 1981 12
5 Materials Management amp Housewlring May 18 - 19th 1981 9
gt1
13
NUMBER OF COURSE TITLE DATES HELD PARTICIPANT
6 Construction Cost Accounting 9May 19 - 23rd 1981
7 Meter Reading Billing and 13August 21 1981
Collection
8 Distribution System Oparation anc 23Aug 24- 25th 1981
Maintenance
9 Safety Procedures -August 25 1981 23
10 Service Drops and Staking Sheets August 261981 8
11 Cooperative Manaaement Wnrkqhnn 5August 27th 1981
12 Cooperative Workflow Procedure March 1 6th 1982 12
13 Safety Trainini January 21 -26 1923 24
RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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13
NUMBER OF COURSE TITLE DATES HELD PARTICIPANT
6 Construction Cost Accounting 9May 19 - 23rd 1981
7 Meter Reading Billing and 13August 21 1981
Collection
8 Distribution System Oparation anc 23Aug 24- 25th 1981
Maintenance
9 Safety Procedures -August 25 1981 23
10 Service Drops and Staking Sheets August 261981 8
11 Cooperative Manaaement Wnrkqhnn 5August 27th 1981
12 Cooperative Workflow Procedure March 1 6th 1982 12
13 Safety Trainini January 21 -26 1923 24
RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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RURAL ELECTRIFICATION DEMONSTRATION PROJECTS
By mid 1979 after the RECs has been organized employee complement
selected and management training courses conducted it became evident
that thfre would be a considerable time-lapse until electric generating
equipment was available and electrical distribution systems were in place The major cause of the expected delay related to the time required to
prepare and issueIFBs select suppliers and receive material sequipshyment on site Both USAID and the PDO-RE were desireous that some
physical facilities be installed and consumers connected at an earlydate
Therefore it was decided that demonstration rural electrification
projects would be installed in each REC area
LOMBOK RE-DEMOPROJECT
The Lombok REC was chosen as the location forthe first RE-demo project
USAID funished excess property generars at no cost to the REC other
than transpotation inspection and testing expense Five 100 KW and
one 50 KW-gensets were installed in a new power-plant building conshy
structed inAikmelEast Lombok using rupiah loan funds
Cost of distribdtion system constructionmaterialsequipmnent procured
in-country were paid from the GOI loan Labor and overhead costs for
construction of the distribution system were also paid from the GOI loan
PDO-RE and NRECA staff trainedlocal manpower to perform the construction
activities which began in the first quarter of 1980 Distribution lines
were built in three desas with a 200 wood-pole distribution system capable of reaching fourteen hundred (1400) consumers
lb
Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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Concurrently a temporary office was erected at Aikmel funded through
GOI grant funds
In August of-1980 thesystemwas energized and the Sinar Rinjani REC
began its business operations Only 12 hour electric service was proshy
vided initially but in February of 198k the REC began providing 24
hour electricservice and has continued around the clock service
This REC added a-fourth desa to their aistribution system in 1981
followed by the addition of a fifthdesain1982- By the time contract
construction began on-the main project in the third quarter of
1983 the REC was already serving inexcess of two thousand (2000)
consumers
LAMPUNG REC RE-DEMOPROJECT
AID providedfour 100 KW and one 75 KW generatorto this REC which were
installed ina temporary power plant near Metro Lampung in the second
quarter of 1981 The REC paid only the transportation inspection
testing and installation costs
Distribution system and housewiring materialsequipment were procured
through USAID loan funds By special government to government assistance
most of these items were purchased internationallythrough small quantity
procurement to expedite DEMO-project implementation
PDO-RE and NRECA conducted training programs for REC linemen electricians
and power plant operators
Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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36
MI9JKMEOTURA
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01 125 _ is_0_ii11
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Distribution system construction began in the first quarter of 1981 and thesystem was energized inMay of that year
Approximately twelve hundred (1200) poles were installed in 110 Km of distribution line in 3 desa to ultimately reach two thousand
(2000) consumers
In1983 a second RE demonstration projectwas installed by REC personnel in Probolihggo an area in the NE part of-the RECs service area This was prompted by a request from national government officials to provide electric service to this area which was to be the scene of an international agricultural exposition inAugust of that year
Approximately eight hundred (800) wood poles were installed in 70 Km of distribution line to ultimately serve one thousand five hundred(1500) consumers At the PACD the Lampung REC was serving a total of nearly four thousand (4000) consumers in the two RE-demo project areas
LUWU REC RE-DEMO PROJECT
USAID also furnished excess property generators to this REC at no cost other than overhaul testing and transportation Five 100 KW andone 35 KW gensets were made available for RE-demo projectsi
Under arrangements similar to Lampung project material procurement USAID loan funds were used to buy distribution system materials for a RE-demo project in desa Bone Bone South Sulawesi Housewiring materials were procured with rupiah loan funds
17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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17
PDO-RE and NRECA conducted training courses for REC linemen and Elecshytricians Construction began inthe second quarter of 1981 and by August of that year a 200 pole low-voltage electrical distribution system had been installed in the densely populated areas of Bone Bone A temporary power plant was installed in the desa and the system was energized ihAugust of 1981 serving over seven hundred (700) consumers
In 1982 a second RE-demo project was installed in the desa Mangkutana in the NE part of the RECs service area A separate temporary power plant was installed and two of the USAID-furnished gensets were placed in service Distribution lines were extended thlroughout the densely populated area-of the desa and in June of 1982 the REC began supplying
electric service to two hundred (200) consumers
At the time that contract construction of the main project began in the second quarter of 1984 this REC was serving approxtuiately one
thousand (10900) consumers in the two RE-demo projects
ELECTRIC-POWER SUPPLY
With the exception of isolatedsmall low voltage lines in some of the desas the service areas of all three RECs were void of electric disshy
tribution lines at the time the RECs were formed Therefore selfshygeneration was the only option for power supply to the RECs consumers Although the potential for small-hydro-el-ectrical installations exists the time-frame for development excludedthe present use thereof Diesel powered generators were chosen as the logical source of power
for each location
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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651-73 502346 41312 6112g18 163 513 6145302
04 TTALOPE8TINGEXPENSES 4105530 430372l (12200) (1163003) (071040 01664303049 4374594 5417]80 6233702
(2050944) (1119020) 12537337) (277760) (1469216) is Cross OpstTng 80rgin(3 i0n14) (1107020) (2173118) (2303104)
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(2803313) (2601203 00040(2300026) (2C200 S42602 2o $40
17 CeShISo-rO~etttllln200982 (2640310) _ 200982Ing our0n (ISin 16) J962908) (3227974) (2190734) (30310107200932 (3371127)200982 (3617q)200183 542602 54260Z200282 200J82
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26 TcnnOltn5Itn (100030) 39803 bull3837614372 1385120 1231441TOTLNON-Wl0ATIN(XPENS 147572 28942 478005 (142521 906002 54S53 1776470 166Z36 110390427 (22 1n01) 000402 333102
2 TOALK=IN (19pl 21) (2966024) (319232) (13054863) 275842 (3641755) (3100044) (3960901 (05 31 ( 60477(01031) (1430076) 774000) nr 2071500 201500 00 C00 2446-00 0 44S100 2420097Oo 0 94625 11Co4520 4 2717400 242000 01S0
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31 TOl m04R I8L0 DIP(20pl2 (02007SS) (600044)(944024) 11171332) (1031363) 23324)
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7 24754 26031 Uls 81l114 000i 2414004 11970 23100 2327 30021
1804 17261 16286 201 JS3061 2086
0 n e per eurooNsur -2704 ZSg 6 174 110 111
2673 3311100 27
2 170 OU 160 060 00106- 1i Aerg1 m -n per rA billed is_1
01 125 _ is_0_ii11
20 60 rso 00 coeptI per 1 s -e r
Itwas indicated infeasibility studies that in total 33 MWs
of generation would be required for the three RECs by the 6th year
of operation The Canadian Government through CIDA was to supply
generation through their loan packagewhich would equal or surpass this
capacity Unfortunately witthe passage of time cost estimates
for generation proposed by CIDA reached the installed cost per KW of
plus or minus US$1200 Therefore the total generation requireshy
ments were reviewed and weighed against CIDA proposals and inthe last
half of 1982 itwas decided that theCIDA loan would not be utilized
for electrification projects
The PDO-RE and NRECA evaluated the power supply problem in view of the
new developments Itwas agreed that a request would bemade to USAID
to allow the procurement of 1200 KWs of additional generation 400 KW
per REC from USAID-loan funds to supplement the excess-property
generation that USAID had-previously furnished USAID approved the
request and in late 1983 orders were placed
In 1984 the PDO-RE was listed to receive an allocation from the US
Government PL480 program which was to be used for procuring generating
equipment It Oas recognized however that several months would pass
before these funds would actuallybe available so again USAID was
requested to allow-the purchase of additional generation from the USAID
loan Upon approval an 800 KW generator was ordered for the Luwu REC
and an 800 KW and a 400 KW generator for the LombokREC These gensets
arrived in-country in late 1984
19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
OPERAT[ING~STAMK o 1184 w T C
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19
USAID also approvedthe procurement of parts for overhaul and maintenance
of the excess property generators An order was placed inlate 1983 and by the PACD each REC had received a supply of parts which should last two or more years (Additional parts will be ordered through PL480 funding)
At the PACD PDO-RE staff was working on the technical specifications
for generation equipment and power plant buildings were being designed Itisexpectedthat PL480 funds will be available by mid-1985 and that
equipment may then be ordered
CONSTRUCTION
This report will only highlight construction by category and time-frame The final report-of theA amp E consultant CT Main International inshycluded complete informationon construction activities and costs
Headquarters -----After the 3 RECs were organized in early 1979
assistance was provided by consultants in the selection of headquarters sites Design work began in that same year but due to unexpected proshy
blems contracts for construction of headquarters facilities were not
awarded until mid-1982
20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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36
MI9JKMEOTURA
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20
The Lampung REC headquarters construction was contracted in June 1982
and completed in March 1984 The Lombok REC headquarters constructior
was contracted in September 1982 and completed inOctober 1983
Headquarters facilities for the Luwu REC were contracted in July of
1982 and completed inMay of 1984 Facilities at all sitesincluded
an office building warehouse open storage area roads and fencing
Power Production- Asincluded inearlier pages of this report
temporary power plants were constructed at all threeRECs with rupiah
loan funds Permanent powerplants will be funded fromPL480 funds
DistributionSystems----- Aside from electrical distribution systems
associated with the RE demonstration projects construction began on
the main project (155 Km) inJuly of 1983atthe Lombok REC and was
more than 90 completeby thePACD
At theLuwu jREC construction began inAugust of 1984 (611Km) and was
about 25 complete at the PACD
At the LampungREC contractorshad beenselected for construction of
the main-projet by the PACD Howeverconstructionwas not scheduled
to begin on the 1405 Km of primary and secondary lines until February
1985 due to lackoftreated poles
21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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36
MI9JKMEOTURA
OKTII STATISTICS- End
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21
BUSINESS OPERATIONS
From the formation of the RECs in early 1979 until the time reloan agreements werecompleted with BRI and GOIloan fundswere made available in Februaryof1980 the only source of funds for the RECs was (DIP)grant funds Control banking and accounting for DIP funds was the sole responsibility of the DGC project coordinator and his staff
In preparation for the RECs ownbusiness operations NRECA staff preshypared the format for accounting and reporting General and subsidiaryledger books were obtained from the USA and an accounting system was installed that patterned the system used by USA RECs with modifications for local-conditions banking etc
Bank accounts were opened in each REC area to control cash receiptsand expenditures from the four sources of funds for the RECs GOI rupiah loal funds membership fees (Rp 1000 per member) housewiringfunds and general revenue from sale of electric energy With theexception of membership fees two bank accounts were opened for all funds ---one serving as a depository referred to as the Board ofDirectors account andthe second serving as a disbursement account for use by the manager Transfersfrom receiving to disbursement account is controlled by the Board of Directors
NRECA designed and had translated to Bahasa Indonesia 70 different formfor use in the business operatidns (constructionand operations)of the REC The PDO-RE staff had these reproduced in large quantiti-z and forwarded to the RECs
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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17271067 (2476840
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1287343 211860
12700717 21119964
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23 I2nOrl i np 10420 12441 07647 029744 - 80300 921526 411710 28173 41467 811817 70376
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121812 731437
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(337871S) 1091354 2062130)
69210 290802 915837
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1643023 113012
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(1004727) 1347307
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12110 275011
102447 (150545)
(5307597) 1811080
(349117)
80720 311267 812772
(2410402
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81400 140250 427878
7060 23703
1017762 1121489
7281 700
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190074 1127105
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1300714
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(1185521
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1148403 110838
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- ]euro e ric9v I ma 32 34822 2442 1002 3628 337 3602 1424 17 1
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211 178
0I89
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17 4028
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40 7170i
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36
MI9JKMEOTURA
OKTII STATISTICS- End
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6 S~~0 OTT000- p4Si
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110200 4 350 1 5
13 111- e pns 03~ 17 500 17250 17 400 17000 48 90D 16900 30 30
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04 TTALOPE8TINGEXPENSES 4105530 430372l (12200) (1163003) (071040 01664303049 4374594 5417]80 6233702
(2050944) (1119020) 12537337) (277760) (1469216) is Cross OpstTng 80rgin(3 i0n14) (1107020) (2173118) (2303104)
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26 TcnnOltn5Itn (100030) 39803 bull3837614372 1385120 1231441TOTLNON-Wl0ATIN(XPENS 147572 28942 478005 (142521 906002 54S53 1776470 166Z36 110390427 (22 1n01) 000402 333102
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1031 833 902
1587 15371324 11301107 02Z3 1-ter rseltul sq ics 343 28000838 75
7 24754 26031 Uls 81l114 000i 2414004 11970 23100 2327 30021
1804 17261 16286 201 JS3061 2086
0 n e per eurooNsur -2704 ZSg 6 174 110 111
2673 3311100 27
2 170 OU 160 060 00106- 1i Aerg1 m -n per rA billed is_1
01 125 _ is_0_ii11
20 60 rso 00 coeptI per 1 s -e r
-----
22
membership fees ----Each prospective member-consumer isrequired tocomplete an application for membership and pay a fixed fee of Rp 11000After approval of the membership application by theBoard of Directorsa membership certificate is issued to the memberisrefunded-if The membership feethe member moves from the REC service area) howeverifan unpaid energy bill exists the membership fee isapplied againstthe accounts receivable
Housewiring -L All RECs conduct housewiring programs as a part oftheir regular business functions The RECs prepare wiring diagramsmaterial quantity estimates provide material and contract-electriciansto perform the installation andmake final inspection of the workThe REC bills the member on an actual cost of installation basis whichin the beginning was about Rp 10000 per house for three lights andone outlet and at the PACD was averaging-closer
to Rp 20jo00 per house
Itwas deemed essential that the REC become involved in housewiring tobe sure that members were ready to receive electric service when theRECs distribution lines were-installed
GOI Rupiah LoanFunds NRECA initiallyrecommended
aand prepared a budget processformat for requesting loanfunds on a quarterly basisThis was accepted by PDO-RE however engineers estimates of requireshyments for the first loan fund release were vastly over estimatedThe first release of funds was so large that PO-RE and the banking
institutioflBank Rakyat Indonesia mutually agreed that a major shareof the first release be returned to BRI
-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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36
MI9JKMEOTURA
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-----
Thereafter loan fund releases were limitedto specific individual purposes which was beneficial from the standpoint of limiting interest expense but troublesome from the standpoint of project implementation
The process remained the-same at the PACD PDO-RErequests BRIJakarta for loan fund advance to a REC for a specific purpose and BRI transfers the fundsto the RECs account in the BRI branch in the project area
Operating Revenues (sale of electric energy) Prior to REdemonshystration project energizationNRECA and the PDO-RE recommended retail electric rates (tariff) applicable ateach REC Rates were established based on the current cost of diesel fuel and other expected expenses Unfortunately diesel fuel costs increased from Rp 50liter at the time of energization to a price of Rp 220liter at the PACD
The RECs were new entities inthe electrical powerfield in Indonesia As a resul itwas not easily defined as to what agency controlled their tariff As a result tariff increases always lagged farbehind diesel fuel increases resulting ina sizeable deficit financial operation at each REC Revenues received from the sale of energy were supplemented with GOI DIP funds to enable the RECs to meeftall expenses
Most of the member-consumers served in the RE demonstration project had never lived ina home with-electric service They were not accustomed to paying bills monthly for a service that had already been received Therefore in the beginnin collection was a problem for
the RECs
NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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36
MI9JKMEOTURA
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NRECA prepared operating-policies for the three RECs including a policy on disconnect for non-payment of energy billing Itwas diffishycult to enforce inthe early months of operation but after numerous consumers were disconnected and the examples were set collection problems minimized
Statistics ----- On pages 34 through 36 of this report are summaries of operations at each REC for calendar year 1984 The consumer conshynections are listed in the bottom section of eachsummary The LampungRECs consumer total did not change substantially since construction of the main distribution lines had not begun
The average Kwh per consumer at Lampung and Lombok RECs ranged from 21 to 28 Kwhmonth while at the Luwu REC consumption level dropped substantially as additional consumers were added By comparison the consumption level in early years operations depicted in the feasibility studies- was20 Kwhmonth
Line one of each summary lists the actual rupiah billing for energy sales while line two represents disconnect-reconnect fees
The cost ofthe largest expense item diesel fuel and lube oil is shown on line four The GOI increased the price of diesel fuel subshystantially inMarch of 1984 andthis isreflected in April fuel costs
Line fifteen of the summaries shows thi cash gain or(loss) Itmay be noted that the Lombok a d LuwuRECs experienced a loss (cash expenses exceeded billed energy sales) every month during 1984
---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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36
MI9JKMEOTURA
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04 TTALOPE8TINGEXPENSES 4105530 430372l (12200) (1163003) (071040 01664303049 4374594 5417]80 6233702
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---------------------- ---------- ----------
----------- --------------------------------------------------
25
This isbecause of relatively low connection levels and low tariff The Lampung REC showed a cash gain for seven months of the year
Interest accruals are not cash expense items during loan grace periods since the accrual is deducted from principal loan balance Depreciation
isa book accrual only
Incomeexpenseon a-cash basisfor calendar year 1984 as converted
to rupiah per Kwh is listed as follows
LAMPUNG LOMBOK LUWU
Revenue perKwh billed Rp 162 Rp 141 Rp 161 Cash expeise per Kwh billed 158 194 257
Net gain or loss per Kwh billed 4 (53) (96)
The high expense per Kwh bllled for Luwu relates to higher costs of diesel fuel than theother RECs higher system losses because the demonstration projects were low-voltage installations and relatively
low Kwh sales
Unfortunately the RECs had not reached a consumer connection level at the PACD high enough to produce really meaningful operating statistics By the endof 1985 itisexpected that the RECs financial and statisshytical reports can provide-the basis for project viability studies and
financial projections
26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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26
LESSON LEARNED
CONSULTANT SERVICES
Intheir desire to implementtheRE projects inIndonesia-at the earliest possible date USAID required the OMT consultant to bring their entire team to Indonesia in the first half of 1979 Howeverbeyond USAIDs c6ntrbl long delays were experienced before -the main project was constructed at each location Team members were occupied with RE demo project preparations construction and operation however by the time construction of the main projects were underway USAID grant funds were depletingand most of the OMT team members had departed Indonesia
With regards to two separate consulting-firms (Aamp Eservices and OMT services) inretrospect itwould have been beneficial ifthere had beenone team leader incharge ofboth teams Better coordination would have-resulted and project implementation may have benefited
PROCUREMENTWAREHOUSING
Original construction scneaules indicated that headquarters facilities especially warehouse buildings would be constructedfirst and be readyfor use before construction materials arrived Unfortunately several problems occurred indesign and tendering and most of the construction material arrived at the RECs before the headquarters facilities were completed This created astorage and security problem and resulted inmore-loss and breakage then usualdue to extra movement of materials
27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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27
TECHNICAL
At the PACO one major problem was left unsolived relating to distrishybution system protection sectionalizing The oil circuit reclosures that were ordered for the-three RECs will not coordinate with power plant protective devices When a fault occurs on the dir~ihtion
system the power plant goes off-the-ine
At the time the A amp E firm selected OCRs for distribution system proshytection itwas still planned that large-size generators with a relashytively high generating voltage would be suppliedthrough the Canadian loan If this had occurred coordination between distribution system and power plant protective devices would not have been a problem However the generators procured more or less piece-meal are of relashytively small size and all generate at low voltage (380volts) Under existing conditions coordination can not be achieved
A second problem in the technical field relates to transformers for the distribution sy- As usual for rural distribution systems single phase transformers were chosen and all have a 220440 volt lowshyvoltage rating To provide service to three-phase loads two or three transformers are normally banked (connected together)-to provide three
phase power
The distribution systems include V-phase lines with two primary conductors and a neutral conductor Normally two single phase transshyformers are banked open-wye open-delta to provide three-phase from these lines Unfortunately with 220440 volt secondary voltage these transformers can not provide the standard 380 volt 3 phase from V-phase
lines
28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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36
MI9JKMEOTURA
OKTII STATISTICS- End
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04 TTALOPE8TINGEXPENSES 4105530 430372l (12200) (1163003) (071040 01664303049 4374594 5417]80 6233702
(2050944) (1119020) 12537337) (277760) (1469216) is Cross OpstTng 80rgin(3 i0n14) (1107020) (2173118) (2303104)
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(2803313) (2601203 00040(2300026) (2C200 S42602 2o $40
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4100 61200 754202 703500 24 Lober 147S7 1 28942 173142 600471 472532 420000 8400 - 40600
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26 TcnnOltn5Itn (100030) 39803 bull3837614372 1385120 1231441TOTLNON-Wl0ATIN(XPENS 147572 28942 478005 (142521 906002 54S53 1776470 166Z36 110390427 (22 1n01) 000402 333102
2 TOALK=IN (19pl 21) (2966024) (319232) (13054863) 275842 (3641755) (3100044) (3960901 (05 31 ( 60477(01031) (1430076) 774000) nr 2071500 201500 00 C00 2446-00 0 44S100 2420097Oo 0 94625 11Co4520 4 2717400 242000 01S0
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1031 833 902
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7 24754 26031 Uls 81l114 000i 2414004 11970 23100 2327 30021
1804 17261 16286 201 JS3061 2086
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01 125 _ is_0_ii11
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28
The RECs will need a stock of single phase transformers with 380 volt
low-voltage rating
REC ORGANIZATIONS
As a part of the loangrant arrangements the GOI provided grant funds to assist in project implementation These funds were made available by the local DGC offices through their normal funding procedures and with normal restrictions One restriction related to the salary level which was relatively low and basically the same for all employees-in general
categories
This created a problem inthe selection and retention of qualified
employees After receiving training at least 30 per cent of the original employees at the REC either left the REC entirely ortransshy
ferred to another position
REC MANAGEMENT
Inthe makeup of a typical REC the Board of Directors is a policy making body and board members as individuals do not become involved in day to day work schedules or employee functions Boord members usually have their own profession or business and only come to the REC
headquarters for board meetings
A lesson was learned in implementing these rural electrification projects Itisalmost an impossible task to confine board members to policy
making functions and allow the manager to do the managing
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
OPERAT[ING~STAMK o 1184 w T C
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d Op~eOln e
8I s 224
146762055 250
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40 6 18710
42 8 2 13200
42 42 1500
1171 -012250
1 7 1
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1814438 447725
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1O011911082 1 166106
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01448700(3240278)
10678300(822000)
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11793936 21500 2
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17271067 (2476840
1207481 2522073
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(337871S) 1091354 2062130)
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7060 23703
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--
36
MI9JKMEOTURA
OKTII STATISTICS- End
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|I l t n n t43072 16110016 832 5S332 106SZ9 331171 It 2 7
3-4464012325 2616051i911= 416-0074 400767176 60861 I01n 7 TOTAL71000C10|0NEOP[LOS 3073346 3000040 300721 0905404 21023 4392717 444$04S 1 40125
6 S~~0 OTT000- p4Si
349790 293982 468600 4(1017 11-8000 IT O t Wt o -rions 315296 1 shy131406 251127 471281 383023 14 704 32124 _ 132406 944121 93580 - 90T _4000 854304 1|4012489 [XPEI$[S 171558 447702 481196 545115
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110200 4 350 1 5
13 111- e pns 03~ 17 500 17250 17 400 17000 48 90D 16900 30 30
651-73 502346 41312 6112g18 163 513 6145302
04 TTALOPE8TINGEXPENSES 4105530 430372l (12200) (1163003) (071040 01664303049 4374594 5417]80 6233702
(2050944) (1119020) 12537337) (277760) (1469216) is Cross OpstTng 80rgin(3 i0n14) (1107020) (2173118) (2303104)
11390M) 16T4-So 1 01 - 863790 839790 839790 1339790 $839790 7
(2803313) (2601203 00040(2300026) (2C200 S42602 2o $40
17 CeShISo-rO~etttllln200982 (2640310) _ 200982Ing our0n (ISin 16) J962908) (3227974) (2190734) (30310107200932 (3371127)200982 (3617q)200183 542602 54260Z200282 200J82
(3091716 2 791 (3571 00) (301330) (2801100) (2502022 (3345002 (3154600) (045015) S10 8ie8C7rLIS 6ln (17 0I) (23477927 (3163890) (3423950)
J36420 603731 0130330 8746030133667 23818 511350 4081007903465 171011203 0oRe rIn6 1-o f 36340--- 574039 Z T tA 00 70LMT|OG0200812 2034021 Ot4r 1- 09340
003460 1700003 1235670 203801 20310 4004027 2170761 1050735 S630330
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4100 61200 754202 703500 24 Lober 147S7 1 28942 173142 600471 472532 420000 8400 - 40600
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26 TcnnOltn5Itn (100030) 39803 bull3837614372 1385120 1231441TOTLNON-Wl0ATIN(XPENS 147572 28942 478005 (142521 906002 54S53 1776470 166Z36 110390427 (22 1n01) 000402 333102
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31 TOl m04R I8L0 DIP(20pl2 (02007SS) (600044)(944024) 11171332) (1031363) 23324)
1031 833 902
1587 15371324 11301107 02Z3 1-ter rseltul sq ics 343 28000838 75
7 24754 26031 Uls 81l114 000i 2414004 11970 23100 2327 30021
1804 17261 16286 201 JS3061 2086
0 n e per eurooNsur -2704 ZSg 6 174 110 111
2673 3311100 27
2 170 OU 160 060 00106- 1i Aerg1 m -n per rA billed is_1
01 125 _ is_0_ii11
20 60 rso 00 coeptI per 1 s -e r
29
From the time of organization of the RECs until the PACD board members
were provided with office space and a small salaryallowance In some instances REC transportation equipment was monopolized by board members to the detriment of REC operations REC managers have learned to live
with this situation
RE DEMONSTRATION PROJECTS
The demonstration projects were effectivefrom the viewpoint of proshy
viding electric service to a few of the REC members at a relatively
early date The Lombok REC for example had alrcady constructed and
energized distribution lines only 1i years after the REC was organized
The other RECs had lines energized2 to 21 years after organization
This can be considered as fast work
Unfortunately too much time was spent implementing small costly demonstration projects to the detriment qfmain project implementation
At the PACD nearly6 years after the RECs were formed only the Lombok
RECs distribution system neared completion withconstruction activities
to continue for 2 or more years at the other RECs
The two REC pilot projects in the Philippines by comparison-were impleshymented much faster Consultants arrived on site in early 1969 By the
third quarter of 1971 part of the main lines were already energized
at both projects and project completion was accomnlid hv +hn =a shy
1972
------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
OPERAT[ING~STAMK o 1184 w T C
128I1Z11 14118034 14998031 14 4 13377219 14702SS
d Op~eOln e
8I s 224
146762055 250
S 7 780 210 13 0 41500
14612107 -
4 23011 2200
1318 6 42210
141 1227 1 21200
40 6 18710
42 8 2 13200
42 42 1500
1171 -012250
1 7 1
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EMP 0 - Fee0 801n0 7718070 70140 L$102s0 8128160 00 8744740 8182820 1230400 2I64SZ0 10010480 1418210
J 5 -t-1 O er t ions 11117 74011174 0 0020121005 7S 0109601190039 81111 011S 061 8 50 167 3 12080307 4 82 13205142 11713Z8 142300 1109781
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0640715 71550
1015110o 4817000
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11468013 487813
10857172290 $77221
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1O011911082 1 166106
8000
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2 47078222207102_ _Ia 2 Oprnlnq 6rln (2204) 192537(032477)
01448700(3240278)
10678300(822000)
1678309 2200071
11793936 21500 2
12863101 107Z936
17271067 (2476840
1207481 2522073
1287343 211860
12700717 21119964
11422924 (10$170S)
1111484 0707309
jj614 0e0 -22 10 1 130902 03220 8 020030 1319035 120020 1319020 1210038 1309008 111228
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71900 Z332
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23 I2nOrl i np 10420 12441 07647 029744 - 80300 921526 411710 28173 41467 811817 70376
24 07 28 27 8
29 30
Labor
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36
MI9JKMEOTURA
OKTII STATISTICS- End
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------
30
RECOMMENDATIONS
REC ManagementTraining ----Itisevident that thethree RECs will need additional assistancein construction materialequipment control while the main distribution lines are still under construction They also need additional assistance and trainingin operation and maintenace of electrical distribution systems plus refresher courses inother
business operations
Itisadvisable for USAID to continue someformof assistanceto-t bull bull a s ta c e to he se
pilot projectsthroughout -1985 and poss-iblyinto 1986 Continuation of OMTconsultant services on a limited basis may be the mostl ff Irtva
solution
Electrical rower buppiy The most critical problem with regards to physical facilities isfflishortageof generation Itwas-fortunate for the RECs that USAID allowed the used of their dollar loan funds to purchase generators after the Canadian loan was set aside However this was only interum assistance while the final solution to genset
procurement-was sought
At the PACD the three projects had been allocated in excess of Five million dollars (US $5000000 ) fromthe US Governments PL480 program for generation facilities ItIsimperative that the PDO-RE work out the details for use of these funds and place orders for additional
generation at the earliest possible date
31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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MI9JKMEOTURA
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31
Distribution Systems----- The most critical need is wood poles for
the Lampung and Luwu RECs Although the pole treatent plant at the Lampung REC has been prepared for treating poles a shortage of raw
poles still exists The PO-RE should review management problemsat
the treating plant and takewhat action is necessary in an effort to
expedite pole deliveries from suppliers
Financial The Lampung REC will_ave a serious shortfall in rupiah
loan funds which could delay distribution system construction The
shortfall relates to the much larger distribution system than originalshy
ly envisioned in feasibility studies The Luwu REC will possible
experience a relatively small shortage of rupiah loand funds also
7eis important that PDO-RE face this problem at an early date and request additional funding USAID could be of assistance since prompt
utilization of USAID-loan construction materialsequipment is in the
best interest of all parties concerned
Still under the heading of financial the terms for the GOI rupiah loans
are not favorable for the RECs or for RE in general- The grace period
is only six years and the interest rate of 66 is too high
Rupiah loan money was first made available to theRECs in February of
1980 Therefore the six year grace period will terminate in February
of 1986 Due to long delays in main project implementation the RECs
revenue will be insufficient to begin loan amortization by February 1986
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
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MI9JKMEOTURA
OKTII STATISTICS- End
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4100 61200 754202 703500 24 Lober 147S7 1 28942 173142 600471 472532 420000 8400 - 40600
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300540 14042 -230m53 0710 317524S 0000201 4313056
26 TcnnOltn5Itn (100030) 39803 bull3837614372 1385120 1231441TOTLNON-Wl0ATIN(XPENS 147572 28942 478005 (142521 906002 54S53 1776470 166Z36 110390427 (22 1n01) 000402 333102
2 TOALK=IN (19pl 21) (2966024) (319232) (13054863) 275842 (3641755) (3100044) (3960901 (05 31 ( 60477(01031) (1430076) 774000) nr 2071500 201500 00 C00 2446-00 0 44S100 2420097Oo 0 94625 11Co4520 4 2717400 242000 01S0
021500 2400507O22 Ibot| (- IP fund 2405000 071100 946421 1650OV410333 1148164ISZ5901 03309
31 TOl m04R I8L0 DIP(20pl2 (02007SS) (600044)(944024) 11171332) (1031363) 23324)
1031 833 902
1587 15371324 11301107 02Z3 1-ter rseltul sq ics 343 28000838 75
7 24754 26031 Uls 81l114 000i 2414004 11970 23100 2327 30021
1804 17261 16286 201 JS3061 2086
0 n e per eurooNsur -2704 ZSg 6 174 110 111
2673 3311100 27
2 170 OU 160 060 00106- 1i Aerg1 m -n per rA billed is_1
01 125 _ is_0_ii11
20 60 rso 00 coeptI per 1 s -e r
32
As a first step the PO0-RE should request an extension of the grace
period to match the 10 year grace period on the US dollar loan
A second step oran accompanying step shouldbe arequest for a more
favorable interest rate
Office Equipment------ It was unfortunatethatcomputers were not
included in the US dollar loan procurement PDO-RE should make-every
effortto seek fundsFrom other sources and modernize the REC operations
The hand-billing procedure nowbeing followed is slowcostly and
allows room for many errors The general accounting and reporting
procedures plusinventory control should also be computerized
Ironically the RECs were equipped with modern tools and test equipshy
ment for operation and-maintenance ofthe electrical distribution
systemsbut accounting department needs were unintentionally bypassed
Possibly PL480 funds can be used for this needed procurement in addition
to generating equipment
OilCircuitReclosures----- As included in earlier pages of this
report problems exist with coordination between distribution system
and-power plant protectivedevices USAID and NRECAshould assist
the PDO-RE in finding a solution The logical first step may be contact
with the OCR manufacture to receive-the benefit of their recommendations
Changing the trip coils in the OCRs to much smaller sizes may be one
solution
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
OPERAT[ING~STAMK o 1184 w T C
128I1Z11 14118034 14998031 14 4 13377219 14702SS
d Op~eOln e
8I s 224
146762055 250
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40 6 18710
42 8 2 13200
42 42 1500
1171 -012250
1 7 1
TOM20 re2en 1470Z01U 97109780 0840810 1403907 142S4512 1111481 1412402 1407014 140000 14928141 11277219 04702300
EMP 0 - Fee0 801n0 7718070 70140 L$102s0 8128160 00 8744740 8182820 1230400 2I64SZ0 10010480 1418210
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0640715 71550
1015110o 4817000
1481707a 42600
271031258 181496
11101038 40900
10714530 2116001
1814438 447725
1078706
8 0 iblI0o - Oportlon 8000 45900
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51937832200373 37407
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1011020
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118710
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125700
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13361811631411361
1275
11468013 487813
10857172290 $77221
12700
1O011911082 1 166106
8000
24818 08818 1211111shy4o3
6aG l 8 Adefnit829 1614931 296301 12140 1208383 12008 440022 1417817 130340 125142 1042281 14116005 00
2 47078222207102_ _Ia 2 Oprnlnq 6rln (2204) 192537(032477)
01448700(3240278)
10678300(822000)
1678309 2200071
11793936 21500 2
12863101 107Z936
17271067 (2476840
1207481 2522073
1287343 211860
12700717 21119964
11422924 (10$170S)
1111484 0707309
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940126 006306
(23707431006206
213770 94208
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23 I2nOrl i np 10420 12441 07647 029744 - 80300 921526 411710 28173 41467 811817 70376
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22 TALVASS2(19 pln 27) IatribotinfM DIP 034 MA2LNI ll IN310l DIP (1 p1121 I
121812 731437
1482704 12002
1223453 804390
11671 178430
167711 (7179071)
916007)44132) 0426072 0081864
10375
637051
1343271 (413101)
(337871S) 1091354 2062130)
69210 290802 915837
(77797l (1903711
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1643023 113012
220 70000 50382
(1004727) 1347307
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12110 275011
102447 (150545)
(5307597) 1811080
(349117)
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81400 140250 427878
7060 23703
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--
36
MI9JKMEOTURA
OKTII STATISTICS- End
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0 PIe-t 1 62175 SIM S3 29484 - - - S2 4f 3 P21017 30Z 500 Z766543 250 10ZG 400 Z 5 400 per i mis 2722774 2719617 S4361-shy
|I l t n n t43072 16110016 832 5S332 106SZ9 331171 It 2 7
3-4464012325 2616051i911= 416-0074 400767176 60861 I01n 7 TOTAL71000C10|0NEOP[LOS 3073346 3000040 300721 0905404 21023 4392717 444$04S 1 40125
6 S~~0 OTT000- p4Si
349790 293982 468600 4(1017 11-8000 IT O t Wt o -rions 315296 1 shy131406 251127 471281 383023 14 704 32124 _ 132406 944121 93580 - 90T _4000 854304 1|4012489 [XPEI$[S 171558 447702 481196 545115
Z1 9 1 1 2 1 2 043 3 9 16p 3 26 3 01 3 3 7 4 0 S 1 TOM- D1S1R1BJTIlUDN
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U1 Cn n r nt - P- 1 e 24 7 70 7 2 3 0 4 6 S 24 4fi 1 21 3 4 3 0 7 503 4913 7 13Z136
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110200 4 350 1 5
13 111- e pns 03~ 17 500 17250 17 400 17000 48 90D 16900 30 30
651-73 502346 41312 6112g18 163 513 6145302
04 TTALOPE8TINGEXPENSES 4105530 430372l (12200) (1163003) (071040 01664303049 4374594 5417]80 6233702
(2050944) (1119020) 12537337) (277760) (1469216) is Cross OpstTng 80rgin(3 i0n14) (1107020) (2173118) (2303104)
11390M) 16T4-So 1 01 - 863790 839790 839790 1339790 $839790 7
(2803313) (2601203 00040(2300026) (2C200 S42602 2o $40
17 CeShISo-rO~etttllln200982 (2640310) _ 200982Ing our0n (ISin 16) J962908) (3227974) (2190734) (30310107200932 (3371127)200982 (3617q)200183 542602 54260Z200282 200J82
(3091716 2 791 (3571 00) (301330) (2801100) (2502022 (3345002 (3154600) (045015) S10 8ie8C7rLIS 6ln (17 0I) (23477927 (3163890) (3423950)
J36420 603731 0130330 8746030133667 23818 511350 4081007903465 171011203 0oRe rIn6 1-o f 36340--- 574039 Z T tA 00 70LMT|OG0200812 2034021 Ot4r 1- 09340
003460 1700003 1235670 203801 20310 4004027 2170761 1050735 S630330
-lrll 441030 800442 766109 156S313 311 23 47 3100007 94310 3002106 0 o~st~trJe74n$ ) shy
4100 61200 754202 703500 24 Lober 147S7 1 28942 173142 600471 472532 420000 8400 - 40600
22750 003351 27715 236735 2729 IS 0074 - 3964024 4015635
300540 14042 -230m53 0710 317524S 0000201 4313056
26 TcnnOltn5Itn (100030) 39803 bull3837614372 1385120 1231441TOTLNON-Wl0ATIN(XPENS 147572 28942 478005 (142521 906002 54S53 1776470 166Z36 110390427 (22 1n01) 000402 333102
2 TOALK=IN (19pl 21) (2966024) (319232) (13054863) 275842 (3641755) (3100044) (3960901 (05 31 ( 60477(01031) (1430076) 774000) nr 2071500 201500 00 C00 2446-00 0 44S100 2420097Oo 0 94625 11Co4520 4 2717400 242000 01S0
021500 2400507O22 Ibot| (- IP fund 2405000 071100 946421 1650OV410333 1148164ISZ5901 03309
31 TOl m04R I8L0 DIP(20pl2 (02007SS) (600044)(944024) 11171332) (1031363) 23324)
1031 833 902
1587 15371324 11301107 02Z3 1-ter rseltul sq ics 343 28000838 75
7 24754 26031 Uls 81l114 000i 2414004 11970 23100 2327 30021
1804 17261 16286 201 JS3061 2086
0 n e per eurooNsur -2704 ZSg 6 174 110 111
2673 3311100 27
2 170 OU 160 060 00106- 1i Aerg1 m -n per rA billed is_1
01 125 _ is_0_ii11
20 60 rso 00 coeptI per 1 s -e r
-----
33
Transformers ----- The PDO-RE should assist the RECs in procurement of line-type transformers with 380 volt secondary windings to provide service to 3-phase loads from a V-phase primary line Since the amount isnot large say 30 transfomers intota for the three projects
of 15 KVA to 25 KVA sizes possibly it couldalso be included in PL480
loan procurement
Productive Use of Electric Energy As aresult of insufficient
power supply-from the start of the RE demonstration projects and continuing to the PACO the RECs have not actively promoted the proshyductive use of electrical service When the power supply problem is
overcome the RECs should receive help inestablishing effective
programs PDO-RE should take the leadin coordinating efforts for the three RECs USAID should monitor the success of productive use proshymotion possibly with a short-term consultant whose overall assignment
may betotal project evaluation Proper timing may relate to the
period wheniPL480 funded generation isinoperation
NRECA believes that the potential for productive use of electric service
exists in many forms in all three REC areas A well planned coordishynated programs supplemented-with low-interest loanavailability for
electrical equipment procurement are the missing ingredients
SUMMARY
This completes this NRECA report Assisting and monitoring these RE proshyjects should continue after the PACO nalysis of project viability and long range financial projections can be made after calendar year 1985
financial and statistical data isavailable
OPERAT[ING~STAMK o 1184 w T C
128I1Z11 14118034 14998031 14 4 13377219 14702SS
d Op~eOln e
8I s 224
146762055 250
S 7 780 210 13 0 41500
14612107 -
4 23011 2200
1318 6 42210
141 1227 1 21200
40 6 18710
42 8 2 13200
42 42 1500
1171 -012250
1 7 1
TOM20 re2en 1470Z01U 97109780 0840810 1403907 142S4512 1111481 1412402 1407014 140000 14928141 11277219 04702300
EMP 0 - Fee0 801n0 7718070 70140 L$102s0 8128160 00 8744740 8182820 1230400 2I64SZ0 10010480 1418210
J 5 -t-1 O er t ions 11117 74011174 0 0020121005 7S 0109601190039 81111 011S 061 8 50 167 3 12080307 4 82 13205142 11713Z8 142300 1109781
7T bull Io12aotl30Pt2UCT 6228000 230122707101 4063201212280 140408600105 -2210101 2700
0640715 71550
1015110o 4817000
1481707a 42600
271031258 181496
11101038 40900
10714530 2116001
1814438 447725
1078706
8 0 iblI0o - Oportlon 8000 45900
R11n 2 - 432809 242210C44g C202oi8810 001222808017000220024(2222 40300 202011a WLObullRWIMEPLM4589 -91 Co~- scmt$ w 63e~e081iss 830798
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02008
27417004720000257
1011020
48S1921112S10112 61441510S
118710
2300337041420 i14425
125700
8009048921459048149
13361811631411361
1275
11468013 487813
10857172290 $77221
12700
1O011911082 1 166106
8000
24818 08818 1211111shy4o3
6aG l 8 Adefnit829 1614931 296301 12140 1208383 12008 440022 1417817 130340 125142 1042281 14116005 00
2 47078222207102_ _Ia 2 Oprnlnq 6rln (2204) 192537(032477)
01448700(3240278)
10678300(822000)
1678309 2200071
11793936 21500 2
12863101 107Z936
17271067 (2476840
1207481 2522073
1287343 211860
12700717 21119964
11422924 (10$170S)
1111484 0707309
jj614 0e0 -22 10 1 130902 03220 8 020030 1319035 120020 1319020 1210038 1309008 111228
I Ca OpTiotnrg60gIn(11 4 16)beao282t08eD82rt90t9S0 1117804007 (4962482814007 bull (z101607804007 - 20023114027
b3110243020 (24611Z
154087 (399732
0296174 1003135
04007 79S650 304i200
940126 006306
(23707431006206
213770 94208
e83 Ope-tin0 60r1n (17 9 10) (232S7172 0782051) (2965614) 31928 22012 (1012002) 289173 (00207) 24120 (3287001 46202
6aa 9nI-1A I t_____Fv sev M 1 -nI euro u 7 9 7 7 5 8 30 0 3 5 8 7 1 4 18 4 2 1 15 9 1 3 S] 19 1 2114 72Z 4 8 7S9 ____5
171 s8 1 1 8w7 1 8 7
010 9n97oth 11W- VATtNG tE1t 821630114511 127769927804 51454930874
17381422540
210347 307080
71900 Z332
1220 1008602
27722 571732
68209 S490
10200 21636
12421 1330283
207208 1321741
23 I2nOrl i np 10420 12441 07647 029744 - 80300 921526 411710 28173 41467 811817 70376
24 07 28 27 8
29 30
Labor
029r
TOTALNON-OW2ATI026 ft- p0n123 Kvn (2 1 1)
22 TALVASS2(19 pln 27) IatribotinfM DIP 034 MA2LNI ll IN310l DIP (1 p1121 I
121812 731437
1482704 12002
1223453 804390
11671 178430
167711 (7179071)
916007)44132) 0426072 0081864
10375
637051
1343271 (413101)
(337871S) 1091354 2062130)
69210 290802 915837
(77797l (1903711
17786m U8237
05113 4S513
24Z487 264414
1643023 113012
220 70000 50382
(1004727) 1347307
342$00
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MI9JKMEOTURA
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MI9JKMEOTURA
OKTII STATISTICS- End
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(2050944) (1119020) 12537337) (277760) (1469216) is Cross OpstTng 80rgin(3 i0n14) (1107020) (2173118) (2303104)
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(2803313) (2601203 00040(2300026) (2C200 S42602 2o $40
17 CeShISo-rO~etttllln200982 (2640310) _ 200982Ing our0n (ISin 16) J962908) (3227974) (2190734) (30310107200932 (3371127)200982 (3617q)200183 542602 54260Z200282 200J82
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22750 003351 27715 236735 2729 IS 0074 - 3964024 4015635
300540 14042 -230m53 0710 317524S 0000201 4313056
26 TcnnOltn5Itn (100030) 39803 bull3837614372 1385120 1231441TOTLNON-Wl0ATIN(XPENS 147572 28942 478005 (142521 906002 54S53 1776470 166Z36 110390427 (22 1n01) 000402 333102
2 TOALK=IN (19pl 21) (2966024) (319232) (13054863) 275842 (3641755) (3100044) (3960901 (05 31 ( 60477(01031) (1430076) 774000) nr 2071500 201500 00 C00 2446-00 0 44S100 2420097Oo 0 94625 11Co4520 4 2717400 242000 01S0
021500 2400507O22 Ibot| (- IP fund 2405000 071100 946421 1650OV410333 1148164ISZ5901 03309
31 TOl m04R I8L0 DIP(20pl2 (02007SS) (600044)(944024) 11171332) (1031363) 23324)
1031 833 902
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7 24754 26031 Uls 81l114 000i 2414004 11970 23100 2327 30021
1804 17261 16286 201 JS3061 2086
0 n e per eurooNsur -2704 ZSg 6 174 110 111
2673 3311100 27
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--
36
MI9JKMEOTURA
OKTII STATISTICS- End
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6 S~~0 OTT000- p4Si
349790 293982 468600 4(1017 11-8000 IT O t Wt o -rions 315296 1 shy131406 251127 471281 383023 14 704 32124 _ 132406 944121 93580 - 90T _4000 854304 1|4012489 [XPEI$[S 171558 447702 481196 545115
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M OWZ) 72S iiS 7Z4089 QO S34 07366 6 762 12 Gene] s AWIn str tI 9 7 73 643907 $ 566 )
110200 4 350 1 5
13 111- e pns 03~ 17 500 17250 17 400 17000 48 90D 16900 30 30
651-73 502346 41312 6112g18 163 513 6145302
04 TTALOPE8TINGEXPENSES 4105530 430372l (12200) (1163003) (071040 01664303049 4374594 5417]80 6233702
(2050944) (1119020) 12537337) (277760) (1469216) is Cross OpstTng 80rgin(3 i0n14) (1107020) (2173118) (2303104)
11390M) 16T4-So 1 01 - 863790 839790 839790 1339790 $839790 7
(2803313) (2601203 00040(2300026) (2C200 S42602 2o $40
17 CeShISo-rO~etttllln200982 (2640310) _ 200982Ing our0n (ISin 16) J962908) (3227974) (2190734) (30310107200932 (3371127)200982 (3617q)200183 542602 54260Z200282 200J82
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J36420 603731 0130330 8746030133667 23818 511350 4081007903465 171011203 0oRe rIn6 1-o f 36340--- 574039 Z T tA 00 70LMT|OG0200812 2034021 Ot4r 1- 09340
003460 1700003 1235670 203801 20310 4004027 2170761 1050735 S630330
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4100 61200 754202 703500 24 Lober 147S7 1 28942 173142 600471 472532 420000 8400 - 40600
22750 003351 27715 236735 2729 IS 0074 - 3964024 4015635
300540 14042 -230m53 0710 317524S 0000201 4313056
26 TcnnOltn5Itn (100030) 39803 bull3837614372 1385120 1231441TOTLNON-Wl0ATIN(XPENS 147572 28942 478005 (142521 906002 54S53 1776470 166Z36 110390427 (22 1n01) 000402 333102
2 TOALK=IN (19pl 21) (2966024) (319232) (13054863) 275842 (3641755) (3100044) (3960901 (05 31 ( 60477(01031) (1430076) 774000) nr 2071500 201500 00 C00 2446-00 0 44S100 2420097Oo 0 94625 11Co4520 4 2717400 242000 01S0
021500 2400507O22 Ibot| (- IP fund 2405000 071100 946421 1650OV410333 1148164ISZ5901 03309
31 TOl m04R I8L0 DIP(20pl2 (02007SS) (600044)(944024) 11171332) (1031363) 23324)
1031 833 902
1587 15371324 11301107 02Z3 1-ter rseltul sq ics 343 28000838 75
7 24754 26031 Uls 81l114 000i 2414004 11970 23100 2327 30021
1804 17261 16286 201 JS3061 2086
0 n e per eurooNsur -2704 ZSg 6 174 110 111
2673 3311100 27
2 170 OU 160 060 00106- 1i Aerg1 m -n per rA billed is_1
01 125 _ is_0_ii11
20 60 rso 00 coeptI per 1 s -e r
--
36
MI9JKMEOTURA
OKTII STATISTICS- End
0 ocolSS4 lh 512094]757 I 3133 I)SI70iII~i r070J iO O0Ut0ng r11102 -204 ______ _~~l---70 1010SISSS ~ 5i
2415 420120 4110000 106460 I OTetltiU$ 2N 211305 20026500 000 5 10 26180 3-94365 7IS210 373130
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0 PIe-t 1 62175 SIM S3 29484 - - - S2 4f 3 P21017 30Z 500 Z766543 250 10ZG 400 Z 5 400 per i mis 2722774 2719617 S4361-shy
|I l t n n t43072 16110016 832 5S332 106SZ9 331171 It 2 7
3-4464012325 2616051i911= 416-0074 400767176 60861 I01n 7 TOTAL71000C10|0NEOP[LOS 3073346 3000040 300721 0905404 21023 4392717 444$04S 1 40125
6 S~~0 OTT000- p4Si
349790 293982 468600 4(1017 11-8000 IT O t Wt o -rions 315296 1 shy131406 251127 471281 383023 14 704 32124 _ 132406 944121 93580 - 90T _4000 854304 1|4012489 [XPEI$[S 171558 447702 481196 545115
Z1 9 1 1 2 1 2 043 3 9 16p 3 26 3 01 3 3 7 4 0 S 1 TOM- D1S1R1BJTIlUDN
Z74 1 1 7 9 4 01 3 7
U1 Cn n r nt - P- 1 e 24 7 70 7 2 3 0 4 6 S 24 4fi 1 21 3 4 3 0 7 503 4913 7 13Z136
M OWZ) 72S iiS 7Z4089 QO S34 07366 6 762 12 Gene] s AWIn str tI 9 7 73 643907 $ 566 )
110200 4 350 1 5
13 111- e pns 03~ 17 500 17250 17 400 17000 48 90D 16900 30 30
651-73 502346 41312 6112g18 163 513 6145302
04 TTALOPE8TINGEXPENSES 4105530 430372l (12200) (1163003) (071040 01664303049 4374594 5417]80 6233702
(2050944) (1119020) 12537337) (277760) (1469216) is Cross OpstTng 80rgin(3 i0n14) (1107020) (2173118) (2303104)
11390M) 16T4-So 1 01 - 863790 839790 839790 1339790 $839790 7
(2803313) (2601203 00040(2300026) (2C200 S42602 2o $40
17 CeShISo-rO~etttllln200982 (2640310) _ 200982Ing our0n (ISin 16) J962908) (3227974) (2190734) (30310107200932 (3371127)200982 (3617q)200183 542602 54260Z200282 200J82
(3091716 2 791 (3571 00) (301330) (2801100) (2502022 (3345002 (3154600) (045015) S10 8ie8C7rLIS 6ln (17 0I) (23477927 (3163890) (3423950)
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003460 1700003 1235670 203801 20310 4004027 2170761 1050735 S630330
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4100 61200 754202 703500 24 Lober 147S7 1 28942 173142 600471 472532 420000 8400 - 40600
22750 003351 27715 236735 2729 IS 0074 - 3964024 4015635
300540 14042 -230m53 0710 317524S 0000201 4313056
26 TcnnOltn5Itn (100030) 39803 bull3837614372 1385120 1231441TOTLNON-Wl0ATIN(XPENS 147572 28942 478005 (142521 906002 54S53 1776470 166Z36 110390427 (22 1n01) 000402 333102
2 TOALK=IN (19pl 21) (2966024) (319232) (13054863) 275842 (3641755) (3100044) (3960901 (05 31 ( 60477(01031) (1430076) 774000) nr 2071500 201500 00 C00 2446-00 0 44S100 2420097Oo 0 94625 11Co4520 4 2717400 242000 01S0
021500 2400507O22 Ibot| (- IP fund 2405000 071100 946421 1650OV410333 1148164ISZ5901 03309
31 TOl m04R I8L0 DIP(20pl2 (02007SS) (600044)(944024) 11171332) (1031363) 23324)
1031 833 902
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7 24754 26031 Uls 81l114 000i 2414004 11970 23100 2327 30021
1804 17261 16286 201 JS3061 2086
0 n e per eurooNsur -2704 ZSg 6 174 110 111
2673 3311100 27
2 170 OU 160 060 00106- 1i Aerg1 m -n per rA billed is_1
01 125 _ is_0_ii11
20 60 rso 00 coeptI per 1 s -e r