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n response to public complaints triggered by two-week blackout in Nias Island, North Sumatra, last month, state electricity operator PLN will offer customers from the remote island a discount scheme for their electricity bill to compensate for economic losses resulting from the incident.

Located in the Indian Ocean, 140 kilometers west of the North Sumatran coast, Nias struggles amid a long-term electricity crisis. PLN data suggests that almost 50 percent of the 319 villages in the province of North Sumatra yet to be connected to the electricity network are located in Nias Island.

The situation exacerbated from April 1 to April 13 when over 80,000 homes in the island went dark due to the ceased operation of the two 10-megawatt (MW) capacity power plants (PLTD) in Moawo and Idanoi, which PLN rent from genset provider PT American Power Rental (APR) Energy.

It was later revealed that APR Energy had elected to suspend the power supply as PLN had failed to settle Rp 90 billion (US$6.6 million) in payments owing for the former’s services in other regions. Immediately after the blackouts, PLN reportedly paid APR energy Rp 50 billion toward the debt.

The electricity supply was eventually restored, but the blackouts had caused considerable financial loss among locals. Fishermen, for example, could not go out to the sea as the ice factory had been forced to temporarily cease operations, fishmongers also suffered losses triggered by the absence of ice blocks.

High schools students, meanwhile, were unable to prepare sufficiently for their national finals examination on April 4 to April 7. The blackouts also reportedly disrupted local people’s access to clean water.

PLN Sumatra regional business director Amir Rosidin confirmed that the company was preparing a discount for its Nias customers.

“About the discount, [we] planned to provide it in May. It should have granted by now, we’ll double check with our [Nias] unit,” Amir told The Jakarta Post last week.

PLN, Amir said, was offering the discount in accordance with the government policy that obliges the firm to compensate customers every time it serves below a certain service standard.

Energy and Mineral Resources Ministry’s director general for electricity, Jarman, said based on such a regulation, PLN should compensate customers by offering a 20 percent discount on the electricity bill should a customer experience less than minimum service standard.

“In the Nias case, PLN must give discounts,” he said.

Amir, however, said that the late payment to APR Energy had been caused by its ongoing review on the latter’s performance.

APR Energy, the company claimed, frequently breached contracts by running generators below the stated capacity set out in the terms of contract.

In 2014, APR Energy ran only 75 percent of the promised capacity while in 2015 it ran only 22 percent, Amir said.

“That’s why we are conducting an external audit on its performance [before paying the bill],” he said.

Earlier this month, APR Energy spread leaflets around Nias, informing residents of its decision to exit the island due to PLN’s unsettled debt.

“PLN has not settled its bill with us. It did not respect our contract but it keeps collecting money from Nias residents for electricity,” APR Energy CEO John Campion said on the statement.

“Thus, we cannot continue the operation in Nias Island – or wherever in Indonesia. At the end of May, we’ll permanently close down our 20 MW diesel-based power generators (gensets) in Nias.”

Home to 700,000 people, Nias, which consists of five regions, needs a 24 MW power supply during peak hours.

In anticipation of APR Energy’s exit, PLN has set up and is operating 21.5-MW gensets in Idanoi and Teluk Dalam.

“By Sunday, our gensets will be able to supply 26 MW of electricity. It will increase to 29 MW by next month,” Amir said.

In a public statement, APR Energy, which has been working with PLN since 2013, offered to sell its gen-sets to PLN prior to leaving.

“They [APR Energy] haven’t given us any specifics yet. We need to know the condition of the machines first,” Amir said.

—JP/ Stefani Ribka