nreca final report rural electrification projects

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NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS DEPARTMENT OF COOPERATIVES CONTRACT AID/ASIA-C-1357 AID LOAN NO. 497-T-052 DECEMBER, 1984

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Page 1: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 2: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 3: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 4: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 5: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 6: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 7: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 8: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 9: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 10: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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

OPERAT[ING~STAMK o 1184 w T C

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Page 11: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 12: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 13: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 14: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 15: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 16: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 17: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 18: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 19: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 20: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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1207481 2522073

1287343 211860

12700717 21119964

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213770 94208

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Labor

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121812 731437

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1223453 804390

11671 178430

167711 (7179071)

916007)44132) 0426072 0081864

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637051

1343271 (413101)

(337871S) 1091354 2062130)

69210 290802 915837

(77797l (1903711

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05113 4S513

24Z487 264414

1643023 113012

220 70000 50382

(1004727) 1347307

342$00

12110 275011

102447 (150545)

(5307597) 1811080

(349117)

80720 311267 812772

(2410402

148080 1830429 1233SS

81400 140250 427878

7060 23703

1017762 1121489

7281 700

50232 111404

190074 1127105

174879

1700 302421

1300714

25019 328207 0474250

(1185521

186 299822

1148403 110838

(4177 18 1270794

- ]euro e ric9v I ma 32 34822 2442 1002 3628 337 3602 1424 17 1

120011084 7121 71471 20844 83028 32667 80067 82844 3031 09701 8212 93008 lS0

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211 178

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174

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17 4028

17

4043 172

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Page 21: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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

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

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MI9JKMEOTURA

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Page 22: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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

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

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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

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125700

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13361811631411361

1275

11468013 487813

10857172290 $77221

12700

1O011911082 1 166106

8000

24818 08818 1211111shy4o3

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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

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b3110243020 (24611Z

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71900 Z332

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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

12110 275011

102447 (150545)

(5307597) 1811080

(349117)

80720 311267 812772

(2410402

148080 1830429 1233SS

81400 140250 427878

7060 23703

1017762 1121489

7281 700

50232 111404

190074 1127105

174879

1700 302421

1300714

25019 328207 0474250

(1185521

186 299822

1148403 110838

(4177 18 1270794

- ]euro e ric9v I ma 32 34822 2442 1002 3628 337 3602 1424 17 1

120011084 7121 71471 20844 83028 32667 80067 82844 3031 09701 8212 93008 lS0

amp- Akoq

I tmae Pa rw per b illed

211 178

0I89

1418

2I4

141

3034

182

2S3

178 3231

174

326S

177 29

17 4028

17

4043 172

40 7170i

0 p 200 203 22 Z2 26 2232 2L A21 I L 1 -shy

$210 3231m - L0m

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2sIlo1 3 MOALr Rq

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5 bull 0 Mrat n 6 Fi|l1 7 TOA 71 )3 c SP

I 0Is04bt 0peti7s-

941n1ancs 10 TOTA0STR0 UT2 UPOME$S

1 00 01sUr2 al li0a10 13 Sles357 3

14 TOTAL4003TING[V=0 10 gross 074r311 I (3 7 1 1 Jlo estrs4rms 17 CoOpre l280 11 |s I)(IS 1

ep1 cent|tl 0oA i3s 1 0Wt=Lls =0l (17 Dim 11) 1 1 W tu lz |oI

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21 OUhs1-2 TOTALM-022T30 REM

23 INsrirf3 000404 0 - | 04 o 2 01r 26 TOTAL RNOU-OKTINGC183 Z No-Op-tl9r0lql(U m2 20 TOTAL 23 (13 plo 2)0 s 21 C-trib

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L-bor ylfmjc|vi=i

m r- Fovr

rtom pw b4 billgdbas3

bull

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1111104

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7133430

(1433S52) 2 1108 40

(441412)

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41250 37Z043 1

2374104 2300 321108

76137 shy

301013 (43043 ) 204297

(4275361)

1~e~]743

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t

1065340

123230 131120

S431531 32093 4 347800 410331

154016

12313 031014 241074 423013

- 3 1 |02 7337107

(0146432) 2 73 8 341

(4934023)

2 7 74 S 74 (7709397)

267100

494110S

480 4992755

5i11656

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020363

12121 311940 25490180 431003

84So 3080737

(0098382) 2 04 083

(8093371)

2 8 0 6 3 4 1 (10900912)

427030 97067 10200

464173

207400 8 2020 323417

28337 (164 S24)

(73730212 1321124

(3022237)

1753

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118113

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(147 418) 12443100

1337304

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SZU760

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6184S67 344439 4SS326

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94SS840

(4107310) 28 15 323

(40ZZ1331

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0171 200

47257

215024 040040 973270)

1541200

17981

28117334 5 132

22

4133028

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(4821730)

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(3103201)

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352219

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744732 283000

10430170

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7916t1 1121747 1000112

37330 44200 43404 7113C34 9169o47 10249613

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51322 316ZIA 13147

4 8433 417146 Z61945 181300 304144 1 00403 3001112 3911sect2 7220M1 0533S2 204231 1314402 4 1 $36 73 74 4 89 384

g103on 9417940 14128183 (17 20111 ( 181 $30 (33 161S) 4 704 31 2 4 303 011 4- 0 12

(1540627 (318503 (817127) 3 184

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2144430 3043000 32723 1560 1000 O 317l

2161010 3113818 203211

11430 2338 - 200041 473200 12002 S11400

342303 2228S 37678

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27 Z

0 S0 4 4 3 2113763210 l 22 7 shy801 4049 149 bull 14 43 shy

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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

-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

Page 23: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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(349117)

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36

MI9JKMEOTURA

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Page 24: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

-----

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

20 60 rso 00 coeptI per 1 s -e r

Page 25: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

-----

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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Page 26: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 27: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

---------------------- ---------- ----------

----------- --------------------------------------------------

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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Page 28: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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01 125 _ is_0_ii11

20 60 rso 00 coeptI per 1 s -e r

Page 29: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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Page 30: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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

128I1Z11 14118034 14998031 14 4 13377219 14702SS

d Op~eOln e

8I s 224

146762055 250

S 7 780 210 13 0 41500

14612107 -

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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

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0640715 71550

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1814438 447725

1078706

8 0 iblI0o - Oportlon 8000 45900

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13361811631411361

1275

11468013 487813

10857172290 $77221

12700

1O011911082 1 166106

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24818 08818 1211111shy4o3

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10678300(822000)

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11793936 21500 2

12863101 107Z936

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1207481 2522073

1287343 211860

12700717 21119964

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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

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

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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

12110 275011

102447 (150545)

(5307597) 1811080

(349117)

80720 311267 812772

(2410402

148080 1830429 1233SS

81400 140250 427878

7060 23703

1017762 1121489

7281 700

50232 111404

190074 1127105

174879

1700 302421

1300714

25019 328207 0474250

(1185521

186 299822

1148403 110838

(4177 18 1270794

- ]euro e ric9v I ma 32 34822 2442 1002 3628 337 3602 1424 17 1

120011084 7121 71471 20844 83028 32667 80067 82844 3031 09701 8212 93008 lS0

amp- Akoq

I tmae Pa rw per b illed

211 178

0I89

1418

2I4

141

3034

182

2S3

178 3231

174

326S

177 29

17 4028

17

4043 172

40 7170i

0 p 200 203 22 Z2 26 2232 2L A21 I L 1 -shy

$210 3231m - L0m

1 OouoIng rn5 shy

2sIlo1 3 MOALr Rq

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5 bull 0 Mrat n 6 Fi|l1 7 TOA 71 )3 c SP

I 0Is04bt 0peti7s-

941n1ancs 10 TOTA0STR0 UT2 UPOME$S

1 00 01sUr2 al li0a10 13 Sles357 3

14 TOTAL4003TING[V=0 10 gross 074r311 I (3 7 1 1 Jlo estrs4rms 17 CoOpre l280 11 |s I)(IS 1

ep1 cent|tl 0oA i3s 1 0Wt=Lls =0l (17 Dim 11) 1 1 W tu lz |oI

23 04012qi 2s em

21 OUhs1-2 TOTALM-022T30 REM

23 INsrirf3 000404 0 - | 04 o 2 01r 26 TOTAL RNOU-OKTINGC183 Z No-Op-tl9r0lql(U m2 20 TOTAL 23 (13 plo 2)0 s 21 C-trib

4 1 f- DIP f d 3 TOTALKc2 I fl IF (n pk )

L-bor ylfmjc|vi=i

m r- Fovr

rtom pw b4 billgdbas3

bull

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7133430

(1433S52) 2 1108 40

(441412)

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41250 37Z043 1

2374104 2300 321108

76137 shy

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(4275361)

1~e~]743

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t

1065340

123230 131120

S431531 32093 4 347800 410331

154016

12313 031014 241074 423013

- 3 1 |02 7337107

(0146432) 2 73 8 341

(4934023)

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267100

494110S

480 4992755

5i11656

317395 Z155768 3313323

020363

12121 311940 25490180 431003

84So 3080737

(0098382) 2 04 083

(8093371)

2 8 0 6 3 4 1 (10900912)

427030 97067 10200

464173

207400 8 2020 323417

28337 (164 S24)

(73730212 1321124

(3022237)

1753

z|1042 8 S

422130

118113

324784 20S1404

(147 418) 12443100

1337304

1794

$|is$4 0 v I 4 4 I98 I2o307174 2t3121

4 z

SZU760

139770 343130

6184S67 344439 4SS326

740432Z

01334

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94SS840

(4107310) 28 15 323

(40ZZ1331

3 0 10 9 7 7 (10033010)

84131 11 325 24647530200

0171 200

47257

215024 040040 973270)

1541200

17981

28117334 5 132

22

4133028

7449S 3173123

6704920 30300 231S00

7411011

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881970

(203907) I 0 oz3 56

(S0923)

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7800030)

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3714amp2 3 4 0 17All

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607102z

433220 70449211

6713020 333032

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213912 ) 2 32 0 01

(3672841)

31 31 1 001213

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ts

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42211 700313

101334 4 3 874 44127s

10 44436

601274 12227 84403 332704 28211S

73 01 5 901312

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(4821730)

4 3

(3103201)

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5473201

354433 80400

352219

4807154 41014

744732 283000

10430170

41i]48 907 1 14141

2t

7916t1 1121747 1000112

37330 44200 43404 7113C34 9169o47 10249613

691933 471410 1137100 41306 9 4163 1S 771734 470773 3057 237n094

71734471 70 $7Z10817490

51322 316ZIA 13147

4 8433 417146 Z61945 181300 304144 1 00403 3001112 3911sect2 7220M1 0533S2 204231 1314402 4 1 $36 73 74 4 89 384

g103on 9417940 14128183 (17 20111 ( 181 $30 (33 161S) 4 704 31 2 4 303 011 4- 0 12

(1540627 (318503 (817127) 3 184

2222210 3041134 36(37621 1 (072340 (lZSamp]31)

2144430 3043000 32723 1560 1000 O 317l

2161010 3113818 203211

11430 2338 - 200041 473200 12002 S11400

342303 2228S 37678

277204 2803172 3423234 13138 330823 234383

4 08341S2 (P387217 (1230332)) 2804413 2420433 710711

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27 Z

0 S0 4 4 3 2113763210 l 22 7 shy801 4049 149 bull 14 43 shy

11 isI

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611481 430700 402734

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41420

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(54200716

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30 1 22

--

36

MI9JKMEOTURA

OKTII STATISTICS- End

0 ocolSS4 lh 512094]757 I 3133 I)SI70iII~i r070J iO O0Ut0ng r11102 -204 ______ _~~l---70 1010SISSS ~ 5i

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F 000- -- 1 Sc 460---

369iS70 - 20OaS - 2010665 2523i50 299l3602219310TOTALREVlIUE 4302190 4110511 411661042 1 1040 132 700 262 50 1 6 250026212 144 0 107300215 0 2171100

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

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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)

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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

Page 31: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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36

MI9JKMEOTURA

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04 TTALOPE8TINGEXPENSES 4105530 430372l (12200) (1163003) (071040 01664303049 4374594 5417]80 6233702

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Page 32: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

------

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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Page 33: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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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1 73 S 1 3 4071 3bg

30 1 22

--

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

F 000- -- 1 Sc 460---

369iS70 - 20OaS - 2010665 2523i50 299l3602219310TOTALREVlIUE 4302190 4110511 411661042 1 1040 132 700 262 50 1 6 250026212 144 0 107300215 0 2171100

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

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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

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)

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

Page 34: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

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

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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1481707a 42600

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11101038 40900

10714530 2116001

1814438 447725

1078706

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1O011911082 1 166106

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24818 08818 1211111shy4o3

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10678300(822000)

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11793936 21500 2

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17271067 (2476840

1207481 2522073

1287343 211860

12700717 21119964

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b3110243020 (24611Z

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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

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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

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10375

637051

1343271 (413101)

(337871S) 1091354 2062130)

69210 290802 915837

(77797l (1903711

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05113 4S513

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1643023 113012

220 70000 50382

(1004727) 1347307

342$00

12110 275011

102447 (150545)

(5307597) 1811080

(349117)

80720 311267 812772

(2410402

148080 1830429 1233SS

81400 140250 427878

7060 23703

1017762 1121489

7281 700

50232 111404

190074 1127105

174879

1700 302421

1300714

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(1185521

186 299822

1148403 110838

(4177 18 1270794

- ]euro e ric9v I ma 32 34822 2442 1002 3628 337 3602 1424 17 1

120011084 7121 71471 20844 83028 32667 80067 82844 3031 09701 8212 93008 lS0

amp- Akoq

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211 178

0I89

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17

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$210 3231m - L0m

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2sIlo1 3 MOALr Rq

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I 0Is04bt 0peti7s-

941n1ancs 10 TOTA0STR0 UT2 UPOME$S

1 00 01sUr2 al li0a10 13 Sles357 3

14 TOTAL4003TING[V=0 10 gross 074r311 I (3 7 1 1 Jlo estrs4rms 17 CoOpre l280 11 |s I)(IS 1

ep1 cent|tl 0oA i3s 1 0Wt=Lls =0l (17 Dim 11) 1 1 W tu lz |oI

23 04012qi 2s em

21 OUhs1-2 TOTALM-022T30 REM

23 INsrirf3 000404 0 - | 04 o 2 01r 26 TOTAL RNOU-OKTINGC183 Z No-Op-tl9r0lql(U m2 20 TOTAL 23 (13 plo 2)0 s 21 C-trib

4 1 f- DIP f d 3 TOTALKc2 I fl IF (n pk )

L-bor ylfmjc|vi=i

m r- Fovr

rtom pw b4 billgdbas3

bull

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7133430

(1433S52) 2 1108 40

(441412)

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2374104 2300 321108

76137 shy

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(4275361)

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t

1065340

123230 131120

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154016

12313 031014 241074 423013

- 3 1 |02 7337107

(0146432) 2 73 8 341

(4934023)

2 7 74 S 74 (7709397)

267100

494110S

480 4992755

5i11656

317395 Z155768 3313323

020363

12121 311940 25490180 431003

84So 3080737

(0098382) 2 04 083

(8093371)

2 8 0 6 3 4 1 (10900912)

427030 97067 10200

464173

207400 8 2020 323417

28337 (164 S24)

(73730212 1321124

(3022237)

1753

z|1042 8 S

422130

118113

324784 20S1404

(147 418) 12443100

1337304

1794

$|is$4 0 v I 4 4 I98 I2o307174 2t3121

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SZU760

139770 343130

6184S67 344439 4SS326

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01334

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94SS840

(4107310) 28 15 323

(40ZZ1331

3 0 10 9 7 7 (10033010)

84131 11 325 24647530200

0171 200

47257

215024 040040 973270)

1541200

17981

28117334 5 132

22

4133028

7449S 3173123

6704920 30300 231S00

7411011

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881970

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(S0923)

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7800030)

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607102z

433220 70449211

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380129 23 1 114

37613 0070 1 2 14 7

974455

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(3672841)

31 31 1 001213

-13003

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40543

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3381048) 00

1a

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ts

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42211 700313

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10 44436

601274 12227 84403 332704 28211S

73 01 5 901312

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(4821730)

4 3

(3103201)

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5473201

354433 80400

352219

4807154 41014

744732 283000

10430170

41i]48 907 1 14141

2t

7916t1 1121747 1000112

37330 44200 43404 7113C34 9169o47 10249613

691933 471410 1137100 41306 9 4163 1S 771734 470773 3057 237n094

71734471 70 $7Z10817490

51322 316ZIA 13147

4 8433 417146 Z61945 181300 304144 1 00403 3001112 3911sect2 7220M1 0533S2 204231 1314402 4 1 $36 73 74 4 89 384

g103on 9417940 14128183 (17 20111 ( 181 $30 (33 161S) 4 704 31 2 4 303 011 4- 0 12

(1540627 (318503 (817127) 3 184

2222210 3041134 36(37621 1 (072340 (lZSamp]31)

2144430 3043000 32723 1560 1000 O 317l

2161010 3113818 203211

11430 2338 - 200041 473200 12002 S11400

342303 2228S 37678

277204 2803172 3423234 13138 330823 234383

4 08341S2 (P387217 (1230332)) 2804413 2420433 710711

(4740433 21 4704 0bull 34

27 Z

0 S0 4 4 3 2113763210 l 22 7 shy801 4049 149 bull 14 43 shy

11 isI

7049213

7 3I11 7141340

611481 430700 402734

7697121

41420

36130 401400 372837 103811 0 07 23

9424604

7 (2z77735) 3 172 341

(54200716

3 2 3 0 3130 3222240(966S276) (302223)2

7116930

44600 714160

6634041 42703 304123

726S436

36743

37711 434840 333SS 1106571

3 4 13 8944215

(1730011S 3 070 00

(48DO043)

232277

2372077

S33003 3S4300

10912

200030 3123212

2341464 2042028

403

1479S-460

1482009

975304 215200

1213i2

1337748 13278

(7100401 ) 0030132 138003

19177397f 34|0

1 73 S 1 3 4071 3bg

30 1 22

--

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

F 000- -- 1 Sc 460---

369iS70 - 20OaS - 2010665 2523i50 299l3602219310TOTALREVlIUE 4302190 4110511 411661042 1 1040 132 700 262 50 1 6 250026212 144 0 107300215 0 2171100

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)

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

Page 35: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

-----

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

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10678300(822000)

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(5307597) 1811080

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7060 23703

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Page 36: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

OPERAT[ING~STAMK o 1184 w T C

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7916t1 1121747 1000112

37330 44200 43404 7113C34 9169o47 10249613

691933 471410 1137100 41306 9 4163 1S 771734 470773 3057 237n094

71734471 70 $7Z10817490

51322 316ZIA 13147

4 8433 417146 Z61945 181300 304144 1 00403 3001112 3911sect2 7220M1 0533S2 204231 1314402 4 1 $36 73 74 4 89 384

g103on 9417940 14128183 (17 20111 ( 181 $30 (33 161S) 4 704 31 2 4 303 011 4- 0 12

(1540627 (318503 (817127) 3 184

2222210 3041134 36(37621 1 (072340 (lZSamp]31)

2144430 3043000 32723 1560 1000 O 317l

2161010 3113818 203211

11430 2338 - 200041 473200 12002 S11400

342303 2228S 37678

277204 2803172 3423234 13138 330823 234383

4 08341S2 (P387217 (1230332)) 2804413 2420433 710711

(4740433 21 4704 0bull 34

27 Z

0 S0 4 4 3 2113763210 l 22 7 shy801 4049 149 bull 14 43 shy

11 isI

7049213

7 3I11 7141340

611481 430700 402734

7697121

41420

36130 401400 372837 103811 0 07 23

9424604

7 (2z77735) 3 172 341

(54200716

3 2 3 0 3130 3222240(966S276) (302223)2

7116930

44600 714160

6634041 42703 304123

726S436

36743

37711 434840 333SS 1106571

3 4 13 8944215

(1730011S 3 070 00

(48DO043)

232277

2372077

S33003 3S4300

10912

200030 3123212

2341464 2042028

403

1479S-460

1482009

975304 215200

1213i2

1337748 13278

(7100401 ) 0030132 138003

19177397f 34|0

1 73 S 1 3 4071 3bg

30 1 22

--

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

F 000- -- 1 Sc 460---

369iS70 - 20OaS - 2010665 2523i50 299l3602219310TOTALREVlIUE 4302190 4110511 411661042 1 1040 132 700 262 50 1 6 250026212 144 0 107300215 0 2171100

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)

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

Page 37: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

$210 3231m - L0m

1 OouoIng rn5 shy

2sIlo1 3 MOALr Rq

35010141 4 fqrPlu r]shy

5 bull 0 Mrat n 6 Fi|l1 7 TOA 71 )3 c SP

I 0Is04bt 0peti7s-

941n1ancs 10 TOTA0STR0 UT2 UPOME$S

1 00 01sUr2 al li0a10 13 Sles357 3

14 TOTAL4003TING[V=0 10 gross 074r311 I (3 7 1 1 Jlo estrs4rms 17 CoOpre l280 11 |s I)(IS 1

ep1 cent|tl 0oA i3s 1 0Wt=Lls =0l (17 Dim 11) 1 1 W tu lz |oI

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21 OUhs1-2 TOTALM-022T30 REM

23 INsrirf3 000404 0 - | 04 o 2 01r 26 TOTAL RNOU-OKTINGC183 Z No-Op-tl9r0lql(U m2 20 TOTAL 23 (13 plo 2)0 s 21 C-trib

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m r- Fovr

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7133430

(1433S52) 2 1108 40

(441412)

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(4275361)

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t

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123230 131120

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154016

12313 031014 241074 423013

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(4934023)

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267100

494110S

480 4992755

5i11656

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020363

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(0098382) 2 04 083

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427030 97067 10200

464173

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(73730212 1321124

(3022237)

1753

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118113

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(147 418) 12443100

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(4107310) 28 15 323

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0171 200

47257

215024 040040 973270)

1541200

17981

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22

4133028

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31 31 1 001213

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(4821730)

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(3103201)

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5473201

354433 80400

352219

4807154 41014

744732 283000

10430170

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2t

7916t1 1121747 1000112

37330 44200 43404 7113C34 9169o47 10249613

691933 471410 1137100 41306 9 4163 1S 771734 470773 3057 237n094

71734471 70 $7Z10817490

51322 316ZIA 13147

4 8433 417146 Z61945 181300 304144 1 00403 3001112 3911sect2 7220M1 0533S2 204231 1314402 4 1 $36 73 74 4 89 384

g103on 9417940 14128183 (17 20111 ( 181 $30 (33 161S) 4 704 31 2 4 303 011 4- 0 12

(1540627 (318503 (817127) 3 184

2222210 3041134 36(37621 1 (072340 (lZSamp]31)

2144430 3043000 32723 1560 1000 O 317l

2161010 3113818 203211

11430 2338 - 200041 473200 12002 S11400

342303 2228S 37678

277204 2803172 3423234 13138 330823 234383

4 08341S2 (P387217 (1230332)) 2804413 2420433 710711

(4740433 21 4704 0bull 34

27 Z

0 S0 4 4 3 2113763210 l 22 7 shy801 4049 149 bull 14 43 shy

11 isI

7049213

7 3I11 7141340

611481 430700 402734

7697121

41420

36130 401400 372837 103811 0 07 23

9424604

7 (2z77735) 3 172 341

(54200716

3 2 3 0 3130 3222240(966S276) (302223)2

7116930

44600 714160

6634041 42703 304123

726S436

36743

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3 4 13 8944215

(1730011S 3 070 00

(48DO043)

232277

2372077

S33003 3S4300

10912

200030 3123212

2341464 2042028

403

1479S-460

1482009

975304 215200

1213i2

1337748 13278

(7100401 ) 0030132 138003

19177397f 34|0

1 73 S 1 3 4071 3bg

30 1 22

--

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

F 000- -- 1 Sc 460---

369iS70 - 20OaS - 2010665 2523i50 299l3602219310TOTALREVlIUE 4302190 4110511 411661042 1 1040 132 700 262 50 1 6 250026212 144 0 107300215 0 2171100

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)

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

Page 38: NRECA FINAL REPORT RURAL ELECTRIFICATION PROJECTS

--

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

F 000- -- 1 Sc 460---

369iS70 - 20OaS - 2010665 2523i50 299l3602219310TOTALREVlIUE 4302190 4110511 411661042 1 1040 132 700 262 50 1 6 250026212 144 0 107300215 0 2171100

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)

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