Introduction

PLN is a state-owned electricity company which acts as the Electric Energy Authority of Indonesia by virtue of Act No. 15 of 1985 and Government Regulation (PP) No. 17 of 1990.

In 1994, by virtue of Government Regulation No. 23 of 1994, PLN was transformed from a Public Utility Company into a Limited Liability Company, but retaining its function as the Electric Energy Authority.

Before the economic crisis of 1997, PLN had high electricity demand growth rate, at 12 to 13 % a year for over two decades. The regional crisis had impacted  significantly on electricity demand which dropped to negative growth in 1998. In 1999 and 2000 electricity demand grew by 9.3 % and 9.6 %, respectively. In spite of this, PLN was able to connect over one million new costumers in 1998. The electrification ratio of Indonesia stands at 54 %.

Over the next few years, PLN will not construct any substantial electric power facilities, but will however continue the development of on going projects. The future power supply will mainly rely on reserves and additional capacity from Independent Power Producers (IPPs). Consequently, there is a foreseen uncertainty in the ability of supply capacity to match demand. The Java-Bali System foresees medium term uncertainty in meeting the projected electricity demand. Worse conditions could be expected from the outer islands, where already twenty-four areas are struggling with power deficit. Electricity services and power quality may decline unavoidably in the years to come.