Volatility in PLN's earnings are remarkable. In 2014, the company generated IDR 11.7 trillion (approx. USD $867 million) in net profit, whereas in the preceding year, it suffered a IDR 30.9 trillion (approx. USD $2.3 billion) net loss. In the first half of 2015, it reported another loss of IDR 10.5 trillion (USD $777 million).

Perusahaan Listrik Negara (PLN), which holds a monopoly on the distribution of electricity in Indonesia and has 59.7 million customers across the country, plans to invest IDR 200 trillion (approx. USD $1.5 billion) over the next five years to expand its electricity transmission network as the government aims to generate an additional 35 gigawatts of power over the same period. However, the company can only account for about 30 percent of required investments to cover the government's ambitious program. The remainder should originate from the private sector.

S&P credit analyst Abhishek Dangra notes that without government support PLN will face difficulty to execute its expansion plans as the company's financial position is already weak. On a positive note, PLN, being a fully state-owned company and major player in the domestic energy sector, can rely on government support. Another positive development is that Indonesia (as well as other countries in Southeast Asia) have been curbing energy subsidies, hence bringing tariffs closer to market prices thus improving energy companies' financial performance.

The Indonesian government subsidizes electricity tariffs of those poorer households that subscribe to PLN's 450-volt and 900-volt electricity packages. However, last month PLN said that 29 million customers are wrongfully enjoying such subsidized tariffs. It is estimated that a total of 44 million customers are subscribed to the subsidized electricity rate, while only 15 million customers are estimated to live in poverty.