Electricity firm proposes rate increases between 23% and 59%<\/p>\n
Leony Aurora, The Jakarta Post\/Jakarta<\/p>\n
State power firm PT Perusahaan Listrik Negara (PLN) wants to
\nincrease electricity charges by between 23 percent and 59 percent
\nnext year, if the government does not increase the subsidy it
\npays the company for oil-based fuels.<\/p>\n
In pricing simulations presented to members of the House of
\nRepresentatives' Commission VII on energy and mining on Friday,
\nPLN showed that with a subsidy of Rp 25.5 trillion (US$2.55
\nbillion), tariffs per kilowatt hour (kWh) would rise from Rp 582
\nat present to Rp 716.<\/p>\n
The other three scenarios included a subsidy of Rp 21.68
\ntrillion and a hike of 29 percent or a subsidy of Rp 12.98
\ntrillion and a 39 percent price increase. The last option
\nmentioned was a power tariff hike of 59 percent, if the
\ngovernment did not provide any subsidy.<\/p>\n
\"Based on government's calculations, PLN will need some Rp 38
\ntrillion next year to cover costs (without a tariff hike),\" said
\nPLN president director Eddie Widiono after the closed-door
\nmeeting.<\/p>\n
The House has decided that PLN has to pay market prices for
\nall oil-based fuels it uses starting October.<\/p>\n
The power utility cannot raise rates to generate more revenue,
\nas such a decision can only be taken by the government with the
\napproval of the House.<\/p>\n
Member of Commission VII Tjatur Sapto Edy said the House would
\nnot accept and choose from the scenarios PLN offered until it had
\ntime to study the issue.<\/p>\n
\"The numbers presented were (without details). We will see the
\ndetailed calculations (before deciding),\" he said after the
\nmeeting. \"The tariff hike may not be that high.\"<\/p>\n
The commission has requested that PLN provide a detailed
\nreport on the planned rises on Oct. 17. \"We will scrutinize the
\ncosts,\" said Tjatur, who is also a member of the House's
\nBudgetary Committee.<\/p>\n
Next year, PLN would likely receive a subsidy of between Rp 15
\ntrillion and Rp 20 trillion, the maximum the government says the
\nstate can afford.<\/p>\n
\"If it's lower (than Rp 15 trillion), industries won't be able
\nto afford (the power increase),\" Tjatur said.<\/p>\n
In light of the higher fuel prices, the House raised subsidy
\nallocations for PLN from Rp 4.1 trillion to Rp 12.5 trillion in
\nthe second revision of the 2005 state budget.<\/p>\n
Starting September, PLN has also raised the multiplying
\nquotient for industries' power usage during peak hours to 2 from
\nas low as 1.4 applied previously, meaning that electricity would
\nbe twice as expensive as that utilized in off-peak hours. It also
\napplies a cash penalty for industries that consume more than half
\nof their average usage during peak hours.<\/p>\n
The last time PLN raised power rates was in the second
\nsemester of 2003, after a series of quarterly hikes by an average
\nof 6 percent starting in early 2002. The government nixed the
\ntariff hike of the last quarter of 2003 amid strong public
\nopposition ahead of last year's general elections.<\/p>\n
The company booked another year of net losses in 2004 at Rp
\n2.02 trillion, but managed to record operational income of Rp
\n2.56 trillion, the first time since the monetary crisis in 1997
\nprompted a string of losses.<\/p>",
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