PROFIT MARGIN AND SUBSIDY ANALYSIS FOR PT. PLN (PERSERO) ELECTRICITY SUPPLY SUSTAINABILITY
THE FINAL PROJECT
By: SIGIT CAHYO ASTORO NIM: 29107155
Magistrate Program of Business Administration School of Business and Management Bandung Institute of Technology 2009
ANALISA MARJIN KEUNTUNGAN DAN SUBSIDI BAGI KELANGSUNGAN PENYEDIAAN ENERGI LISTRIK PT. PLN (PERSERO)
SIGIT CAHYO ASTORO NIM: 29107155 Tanggal Lulus Ujian Akhir (11/05/2009) Tanggal Wisuda (18/07/2009) Program Pasca Sarjana, Institut Teknologi Bandung, 2009 Pembimbing Tesis: Dr. Ir. Herman Darnel Ibrahim, M.sc.
ABSTRAK Harga jual energi listrik di Indonesia diatur oleh Pemerintah, dan kebijakan Pemerintah yang tidak menaikkan Tarif Dasar Listrik sejak tahun 2004 menyebabkan rendahnya pendapatan dari penjualan energi listrik dibandingkan dengan biaya operasionalnya yang mengakibatkan meningkatnya ketergantungan perusahaan pada subsidi dari Pemerintah. Pendanaan bagi investasi yang diharapkan dari tingkat keekonomian Tarif Dasar Listrik ternyata tidak sesuai karena Pemerintah memutuskan untuk tidak menaikkan Tarif Dasar Listrik yang disebabkan oleh daya beli masyarakat yang rendah. Subsidi menjadi kunci penting bagi bisnis PLN, tetapi subsidi yang diterima oleh PLN tetap tidak dapat menutupi biaya produksi dan margin yang diharapkan. Oleh karena itu untuk mengamankan penyediaan energi listrik bagi masyarakat dan untuk memenuhi peningkatan kebutuhan akan energi listrik pada sepuluh tahun mendatang, PLN membutuhkan investasi untuk meningkatkan kapasitas pembangkit dan jaringan transmisi serta infrastruktur ketenagalistrikan lainnya bagi kesinambungan penyediaan energi listrik, dan untuk tetap berjalan, PLN harus menemukan strategi untuk meningkatkan pendapatannya. Riset ini menggunakan metode kuantitatif dan menggunakan analisa pro forma untuk menentukan proyeksi dari tarif, margin keuntungan dan subsidi yang sesuai untuk diterapkan oleh PT. PLN (Persero) bagi kelangsungan penyediaan tenaga listrik hingga 10 (sepuluh) tahun mendatang berdasarkan kinerja keuangan perusahaan 5 (lima) tahun sebelumnya. Hasil dari analisa dalam riset ini menunjukkan bahwa kebijakan pemerintah dalam menentukan subsidi energi listrik, tariff dan margin masih merupakan kunci utama bagi kelangsungan penyediaan energi listrik oleh PT. PLN (Persero) dan diperkirakan akan terus berlanjut untuk tahun-tahun mendatang.
Kata Kunci: energi listrik, margin, proforma, keberlanjutan, penyediaan, subsidi, tarif
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PROFIT MARGIN AND SUBSIDY ANALYSIS FOR PT. PLN (PERSERO) ELECTRICITY SUPPLY SUSTAINABILITY
SIGIT CAHYO ASTORO NIM: 29107155 Date of Final Examination (11/06/2009) Date of Graduation (18/07/2009) Magistrate Program, Bandung Institute of Technology, 2009 Thesis Counselor: Dr. Ir. Herman Darnel Ibrahim, M.sc.
ABSTRACT Electricity selling price in Indonesia are regulated by the Government, and the Government’s Policy not to increase the Electricity Basic Tariff since 2004 has caused lower electricity sales compared to the operation cost, therefore increasing the company magnitude and dependency on subsidy from the Government. The funding for investment which expectedly received from the economic scale of Electricity Basic Tariff was not meet, because the Government decided not to increase the Electricity Basic Tariff due to the low purchasing rate of the society. Subsidy becomes the main key in PLN’s Business, but subsidy what is received by PLN still cannot cover the cost plus the expected margin. Therefore to secure electricity supply for the public and to fulfil the increasing demand of electrical energy on the next decade, PLN need investment to increase the capacity of the generator and the transmission network for electricity supply sustainability. And to survive, PLN must find strategy to increase its profitability. This research is using quantitative method and using pro forma analysis to find the suitable tariff, profit margin and subsidy projection to be applied by PT. PLN (Persero) for electricity supply sustainability until next ten years based on previous five years company’s financial performance. The results of the analysis in this research show that the government policy in determining electricity subsidy, tariff and margin are still the main keys for PT. PLN (Persero) Electricity Supply Sustainability and predicted will remains for the next upcoming years. Keywords: electricity, margin, pro forma, sustainability, supply, subsidy, tariff
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LEGALIZATION PAGE
PROFIT MARGIN AND SUBSIDY ANALYSIS FOR PT PLN (PERSERO) ELECTRICITY SUPPLY SUSTAINABILITY
By: SIGIT CAHYO ASTORO NIM : 29107155
Magistrate Program of Business Administration School of Business and Management Bandung Institute of Technology
Approving,
Counselor:
_________________________ (Dr. Ir. Herman Darnel Ibrahim M.Sc.)
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FINAL PROJECT CONSULTATION
Name NIM Supervisor Topic
No. 1.
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Sigit Cahyo Astoro 29107155 Dr. Ir. Herman Darnel Ibrahim, M.sc. Profit Margin and Subsidy Analysis for PT. PLN (Persero) Electricity Supply Sustainability
Date
Subject/Note
Sign
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PREFACE
Praise belongs to Allah SWT, Lord of all the Universe, The Most Beneficent, The Most Merciful, I would like to thank Allah SWT, because only with His Bless and Help I can completed my thesis which have a title “Profit Margin and Subsidy Analysis for PT. PLN (PERSERO) Electricity Supply Sustainability” as a part of the conditions for finishing my study at the Magistrate Program of Business Administration, School of Business and Management, Bandung Institute of Technology. I would like to take this opportunity to thank my director general Mr. J. Purwono for giving me an opportunity to take the post graduate degree, PT. PLN (Persero) and Directorate General of Electricity and Energy Utilization for their financial supports, SBM-ITB lecturers for sharing their insight and knowledge, SBM-ITB management for being very polite and helpful, Dr. Aries F. Firman as my academic supervisor, Dr. Ir. Herman Darnel Ibrahim, MSc as my thesis counselor for his guidance, Dr. Agung Wicaksono, MSc, MBA and Ir. Ali Basyah Inggriantara, MBA as my final project examiners for their challenging discussions. Thank you to all my awesome friends at ENEMBA 1 SBM-ITB class of 2007 for making my study an unforgettable experience, and the last are for all who helped me that I cannot put their name in because of the limitation of spaces. Finally, thank you especially to my beloved amazing parent and sister who support me until now. Thank you to my beloved fiancée for understanding when I needed to spend time working on this thesis. Hopefully, this research can be useful and give some contribution to whosever read this final project, especially to the company. For sure this final project need developed critics and suggestions for better result in the future.
June, 2009 Prediction is a very difficult art, especially when it involves the future -Neils Bohr (Nobel Laureate Physicist)
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TABLE OF CONTENTS ABSTRAK ......................................................................................................................... i ABSTRACT...................................................................................................................... ii LEGALIZATION PAGE ................................................................................................. iii FINAL PROJECT CONSULTATION ............................................................................. iv PREFACE ......................................................................................................................... v TABLE OF CONTENTS ................................................................................................. vi LIST OF FIGURES ....................................................................................................... viii LIST OF TABLES ........................................................................................................... ix CHAPTER 1 INTRODUCTION ...................................................................................... 1 1.1 Company Brief History ...................................................................................... 1 1.2 Company Business Field .................................................................................... 2 1.2.1 Generation ................................................................................................... 2 1.2.2 Transmission and Distribution .................................................................... 3 1.2.3 Supervisory and Control System ................................................................ 3 1.3 Company Business/Operational Activities ......................................................... 3 1.4 Company Business Issue .................................................................................... 5 CHAPTER 2 ELECTRICITY CONDITION IN INDONESIA ....................................... 7 2.1. Overcoming The Electricity Crisis..................................................................... 7 2.2. Current Condition............................................................................................... 8 2.2.1 Electricity Basic Tariff .............................................................................. 11 2.2.2 Subsidy for Electricity .............................................................................. 11 2.2.3 Expanding capacity (Fast Track Program)................................................ 12 2.3. Company Finance............................................................................................. 13 2.3.1 Low Revenues........................................................................................... 13 2.3.2 Instalment Cost ......................................................................................... 13 2.3.3 Cash Flow ................................................................................................. 14 2.4. Financial Planning ............................................................................................ 14 2.5. Research Questions .......................................................................................... 16 2.6. Research Objective........................................................................................... 16 2.7. Research Scope ................................................................................................ 16 CHAPTER 3 PRO FORMA ANALYSIS ....................................................................... 19 3.1. Methodology .................................................................................................... 19 3.2. Research Design ............................................................................................... 20 3.3. Growth and Composition of Electricity Sales .................................................. 21 3.4. Production and Purchase of Electricity ............................................................ 21 3.5. Customers and Connected Capacity................................................................. 23 3.6. The Income from Electricity Sales................................................................... 23 3.7. Projections and Assumptions ........................................................................... 24 3.7.1 Economic Growth Projection.................................................................... 24 3.7.2 Electricity Consumption Projection .......................................................... 24 3.7.3 Peak Load, Capacity Requirement and Capacity Addition Projection ..... 25 3.7.4 Investment Requirement Projection of Indonesia ..................................... 25 3.7.5 Sales and Subsidy Projection .................................................................... 28 3.7.6 Unit Production Cost Projection ............................................................... 28 3.8. Pro forma Statement ........................................................................................ 29 3.8.1 Income Statement...................................................................................... 30 3.8.2 Balance Sheet ............................................................................................ 31 vi
3.9. Forecast ............................................................................................................ 31 3.10. Profit Margin and Subsidy Analysis................................................................. 32 CHAPTER 4 CONCLUSIONS AND RECOMMENDATIONS.................................... 55 4.1. Conclusions ...................................................................................................... 55 4.2. Recommendations ............................................................................................ 57 4.3. Implementation Plan ........................................................................................ 58 4.3.1 Short-term Program .................................................................................. 58 4.3.2 Intermediate/Long-term Program ............................................................. 59 REFERENCES ............................................................................................................... 60
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LIST OF FIGURES Figure 2.1. Electricity Supply Industry ............................................................................. 9 Figure 2.2. Electricity Supply Problem .......................................................................... 10 Figure 2.3. Current Tariff and Subsidy Policy ................................................................ 10 Figure 2.4. Short-term Financial Planning...................................................................... 15 Figure 3.1. Methodology flowchart ................................................................................ 19 Figure 3.2. Tariff and Subsidy Policy to Sustainable...................................................... 20 Figure 3.3. PLN’s Unit Production Cost Projection all over Indonesia.......................... 29 Figure 3.4. Forecast Calculation in Microsoft Excel ...................................................... 32
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LIST OF TABLES Table 3.1. Composition of Electricity Sales (GWh) ....................................................... 21 Table 3.2. Growth of Electricity Sales ............................................................................ 21 Table 3.3. Production and Purchase of Electricity (GWh).............................................. 22 Table 3.4. Composition of Primary Energy Consumption (%) ....................................... 22 Table 3.5. Number of Customers (in thousands) ............................................................ 23 Table 3.6. Income from Electricity Sales (in million Rupiah) ........................................ 23 Table 3.7. Indonesia Economic Growth Assumptions in RUPTL 2009-2018 ................ 24 Table 3.8. Electricity Consumption, Growth, Electrification Ratio Projection .............. 24 Table 3.9. Peak Load Requirement Projection of Indonesia........................................... 26 Table 3.10. Investment Fund Requirement Projection all over Indonesia ...................... 27
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