Periodic increases in electricity cost planned<\/p>\n
JAKARTA (JP): There will be no more shocking hikes in
\nelectricity costs in the future. Instead, increases will be
\nphased in at frequent intervals, an official of the Ministry of
\nMines and Energy said yesterday.<\/p>\n
Artono Arismunandar, the Director General for Electricity and
\nNew Energy Sources, was quoted by the Antara news agency as
\nsaying that the government is now considering raising electricity
\ncosts periodically, probably every three months.<\/p>\n
The issue has already been discussed with the House of
\nRepresentatives (DPR) and is now being considered by the
\ngovernment.<\/p>\n
Past electricity cost hikes always led to protests by
\nconsumers -- household users as well as industry -- because they
\nwere imposed every 18 months or two years. Once, the hike even
\naveraged 20 percent. This approach also caused inflationary
\npressures because the hikes were usually followed by increases in
\nfuel prices, transport fares and eventually to overall costs of
\nliving.<\/p>\n
\"This is only a proposal to the government. Whether or not it
\nis endorsed will be decided by a presidential decree,\" Artono
\nsaid.<\/p>\n
He explained that the proposal calls for a new formula in
\nwhich the prices of electricity are raised automatically every
\nthree months without burdening users excessively.<\/p>\n
A maximum 0.05 percent increase every three months is
\nconsidered to be reasonable, he said.<\/p>\n
The formula takes into account such factors as the costs of
\ngenerating electricity, the inflation rate and the rupiah
\nexchange rate, he added.<\/p>\n
If the proposal is endorsed, then the hikes in electricity
\nprices can be imposed by the state electricity company PLN and no
\nlonger must await a presidential decree as is the current
\npractice, he added.<\/p>\n
The government's plan to hike the electricity prices was
\ndiscussed during a closed door meeting on Saturday at the House
\nof Representatives (DPR) attended by the Minister of Mines and
\nEnergy, PLN President Zuhal and members of the House's Commission
\nVI which oversees energy, according to the Republika daily
\nnewspaper yesterday.<\/p>\n
Efficiency<\/p>\n
A number of legislators said in response to the plan that PLN
\nshould first strive to improve its efficiency and look for cost-
\nsaving measures instead of passing on the burden to consumers.<\/p>\n
Tadjuddin Noer Said, a member of the House's Budgetary
\nCommission, was quoted by the Antara news agency as saying that
\nthere must be \"greater transparency\" in the way the government
\nmanages strategic industry, including the electricity sector.<\/p>\n
Tadjuddin said a more open mechanism would allow the House to
\nexert influence on the way vital services such as electricity are
\npriced.<\/p>\n
The government last raised electricity prices in February 1993
\nby an average of 13 percent.<\/p>\n
The electricity rates are designed in such a way that the
\nwealthier members of society and the giant users pay more than
\nthe less well to do under the \"cross subsidy\" system.<\/p>\n
The government has also began to allow private firms to build
\nand operate power plants but reserves the right to fix the prices
\ncharged consumers. (emb)<\/p>",
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