PT PLN seeking govt approval for rate increase<\/p>\n
JAKARTA (JP): State electricity company PT PLN is seeking
\ngovernment approval for an increase in power rates of between 2
\npercent and 3 percent, starting in January next year.<\/p>\n
PLN president Kuntoro Mangkusubroro said on Wednesday that the
\nincrease would apply to low-income household consumers, who were
\nexcluded from the last increase.<\/p>\n
In April the government raised electricity prices by an
\naverage of 29.43 percent for household, business and industrial
\nconsumers.<\/p>\n
Low-income households with a consumption of less than 900
\nkilowatt per hour -- constituting about 86 percent of PLN's
\ncustomers, or 24 million households -- were exempt from the
\nprice hike.<\/p>\n
Raising power rates, Kuntoro said, would help bridge the
\ndeficit of PLN's production costs and its electricity selling
\nprice.<\/p>\n
\"The subsidy from the government totals Rp 3.9 trillion, this
\nmeans that we are selling power below its production cost,\"
\nKuntoro told reporters after a hearing with House of
\nRepresentatives Commission VIII for energy affairs.<\/p>\n
The state company buys electricity from independent power
\nproducers at an average of 6 U.S. cents (about Rp 680 at the
\ncurrent exchange rate) per kilowatt per hour (kWh), much higher
\nthan its average selling price of Rp 240 per kWh.<\/p>\n
\"One way to reduce our losses is to raise prices,\" Kuntoro
\nsaid.<\/p>\n
Reducing subsidy spending was part of an agreement with the
\nInternational Monetary Fund (IMF), which is providing the country
\nwith a US$5 billion aid package under a three-year economic
\nprogram.<\/p>\n
House member Irwan Prayitno said that any further price hike
\nmust first undergo House evaluation.<\/p>\n
\"First we evaluate the current situation and see whether the
\npublic is ready for a price hike, then we'll discuss the amount
\nand the timing,\" Irwan said.<\/p>\n
However, Irwan estimated that there was an equal chance of the
\nproposal being approved.<\/p>\n
\"While the public seems unprepared, PLN can no longer afford
\nto lose more money,\" he explained.<\/p>\n
Malaysia<\/p>\n
Meanwhile Indonesian Mineral Resources and Energy Minister
\nPurnomo Yusgiantoro said that Indonesia had offered to sell
\nelectricity to Malaysia through a 170-km-long underwater cable
\nnetwork from Riau to Johor, Malaysia,<\/p>\n
Purnomo said Indonesian President Abdurrahman Wahid raised the
\nproposal with Malaysian Prime Minister Mahathir Mohamad during
\ntheir meeting in Langkawi on Tuesday.<\/p>\n
\"Dr. Mahathir said he would consider the matter,\" Purnomo was
\nquoted by AFX Asia as saying.<\/p>\n
Riau has sizable coal deposits, and Indonesia is willing to
\nset up a coal-powered power station in Riau to supply electricity
\nto Malaysia, he said.<\/p>\n
The area could produce some 5,000 MW of electricity, Purnomo
\nsaid.<\/p>\n
PLN president Kuntoro said that such a project would be
\neconomically viable.<\/p>\n
\"It's possible, because we have a project in Riau that we've
\nbeen thinking of for quite some time, it's the Cirenti project,\"
\nhe told reporters in Jakarta.<\/p>\n
He said that Cirenti had enough coal to make the development
\nof a power plant feasible.<\/p>\n
By using an underwater cable, he said, Indonesia could sell
\nelectricity to Malaysia.<\/p>\n
\"We've been thinking about developing the Cirenti project for
\nabout 10 years,\" he added.<\/p>\n
Kuntoro could not estimate the project cost, but added that it
\nwould have to involve independent power producers, as PLN was
\nunable to commit for large investments.<\/p>\n
PLN is one of the worst performing state companies with losses
\nsoaring to Rp 11.58 trillion (US$1.3 billion) in the first
\nsemester of this year.<\/p>\n
Kuntoro further assured that selling power to Malaysia under
\nthe Cirenti project would not hurt domestic power supplies.<\/p>\n
He said that power demand in Riau would be unable to absorb
\nCirenti's capacity, so some could be sold to Malaysia. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pt-pln-seeking-govt-approval-for-rate-increase-1447893297",
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