The government plans to scrap electricity subsidies for middle and upper-income households to ease pressure on the state budget.
Should the House of Representatives clear the proposal, state power firm PT Perusahaan Listrik Negara (PLN) would apply the policy in July. The policy would affect households using 2,200 watts and above.
"We hope PLN will send all the data we need by next month," electricity and energy utilization head J. Purwono said Thursday. "We hope the policy can be applied in July."
A team is conducting a study to measure how effective the program will be at shaving the budget's allocation for electricity subsidies, he said.
With oil prices skyrocketing, subsidies are estimated to soar to Rp 60.29 trillion (US$6.55 billion), or almost triple the previous estimate of Rp 29 trillion.
Around 30 percent of PLN's power plants are currently generated by oil-based fuels.
Efforts to cut subsidies are part of PLN's goal to save Rp 5 trillion in subsidies this year.
Under the proposed policy, customers whose consume electricity beyond the national benchmark will have their electricity usage charged at a nonsubsidized rate.
The national benchmark is set at 80 percent of the average national electricity consumption.
For households with a 2,200-watt capacity, the benchmark is set at 283 watts. These households would have to a pay nonsubsidized rates of Rp 1,092 per kilowatt hour (KwH) if their electricity usage exceeds the benchmark.
Subsidized power rates for the 2,200-watt household group is set at Rp 614 per KwH, according to PLN.
The average selling price for electricity this year has been pegged at Rp 614 per kilowatt hour (KwH). Production costs are expected to average Rp 1,092 per KwH, of which Rp 658.4 would go toward fuel.
The program is one among several PLN policies to keep the company's budget in check. Under another policy, PLN charges a value-added tax for electricity usage above 1,300 watts. PLN also distributes energy-saving lightbulbs for free.
The company has also scrapped subsidies for the 6,600-watt user group, which includes businesses and wealthy consumers.
Household electricity use accounts for almost 90 percent of the country's total electricity consumption.
Electricity analyst Nengah Sudja said policy decisions made by the government and PLN were prudent as the current subsidies are no longer appropriate for middle and upper-income households.
Nengah said PLN should increase its production efficiency to keep its budget in check.
Previously, the government and PLN had submitted a proposal known as "incentive and disincentive", which was later on rejected by the House as creating a heavier burden for low-income households.