Electricity tariff up next month
Electricity tariff up next month
JAKARTA (JP): The government yesterday announced an average
increase of 7.8 percent in electricity billing rates beginning
next month to raise funds for power development.
Under a presidential decree, the government has also decided
to allow the state electricity company PLN to regularly adjust
its billing rates every three months to cope with increases in
generation costs.
Minister of Mines and Energy I.B. Sudjana told around 100
reporters at a press conference yesterday that PLN's billing
rates will increase by an average of Rp 161.59 (7.39 U.S. cents)
per kilowatt hour (kWh) next month from Rp 150.06 at present,
with the tariff for road lighting increasing at the highest rate,
11.11 percent.
The new rates maintain a cross-subsidy mechanism, allowing
small consumers to enjoy subsidies from large-scale subscribers.
"The tariff increase is important for PLN to raise funds for
the power projects it requires to meet increasing demand,"
Sudjana said in yesterday's meeting, which was attended by
Secretary General of the Ministry of Mines and Energy Umar Said,
Director General of Electricity and Energy Development Artono
Arismunandar and PLN's president, Zuhal.
Sudjana explained that PLN, whose status has been changed to a
profit-oriented and independent firm, will need Rp 12 trillion
($5.49 billion) per annum to finance the construction of new
power stations and distribution facilities, whereas its financial
capability is limited.
"PLN is supposed to build new power stations with a total
capacity of 9,500 megawatts (MW) in the coming five years," he
said.
PLN usually finances its power projects with its own equity,
government investment as well as foreign and domestic loans.
Sudjana said increasing PLN's financial capability is
important because the government's financial resources will
decline.
Sudjana said that the tariff adjustment, made after the latest
increase in February of last year, was calculated on the basis of
the one-year impacts of inflation, depreciation of the rupiah,
increases in fuel prices and electricity charges provided to
privately-run power generators.
"Three months after the November hikes, PLN will further
adjust the tariffs," he added.
Arismunandar estimated regular adjustments every three months
would likely need an increase of only around 0.10 percent or 0.25
percent.
"It is very possible that after a certain three-month period,
tariffs will not rise if inflation, rupiah depreciation, fuel
price developments and the private electricity charging do not
hurt PLN's performance," he said.
He said that PLN's regular adjustment of electricity tariffs
will be strictly supervised by a team from the Ministry of Mines
and Energy and will need approval from President Soeharto.
Tariffs
Arismunandar said that the highest increases in billing rates
is set for public lighting facilities, middle-class households,
social institutions, hotels and some small-scale industries.
He explained that the tariff for the public lighting
facilities will increase by 11.11 percent to Rp 165 per kWh, for
middle-class households (with a capacity of between 501 volt
amperes (VA) and 2,220 VA) by 9.96 percent to Rp 154.61 and for
middle-class households by 9.87 percent to Rp 127.32.
Social institutions will face an increase of 9.86 percent to
Rp 183.46 per kWh.
Tariffs for small-scale industrial plants with electricity
utilization of between 14 kVa and 200 kVa will increase by 8.64
percent to Rp 175.82 per kWh.
Impacts
Both Sudjana and Arismunandar assured that the tariff
adjustment will not hit the country's industries because the
planned electricity tariff hikes are relatively small.
"A 10-percent increase in electricity tariffs will have an
impact of only about 0.25 percent on inflation," Sudjana said.
He said increases in electricity tariffs will also encourage
subscribers to consume power more efficiently.
Zuhal, meanwhile, said that the planned 7.68 percent increase
will enable the company to raise a fund of Rp 240 billion in the
coming five months.
"I should also caution that our electricity tariffs, which are
estimated at Rp 152.50 per kWh, are the lowest in Asia," he
added.
The Philippines, for example, charges Rp 225.42 per kWh,
Singapore Rp 161.68, Thailand Rp 158.51, Malaysia Rp 159.41, Hong
Kong Rp 181.82 and Taiwan Rp 170.41 per kWh, he said. (fhp)
JAKARTA (JP): The government yesterday announced an average
increase of 7.8 percent in electricity billing rates beginning
next month to raise funds for power development.
Under a presidential decree, the government has also decided
to allow the state electricity company PLN to regularly adjust
its billing rates every three months to cope with increases in
generation costs.
Minister of Mines and Energy I.B. Sudjana told around 100
reporters at a press conference yesterday that PLN's billing
rates will increase by an average of Rp 161.59 (7.39 U.S. cents)
per kilowatt hour (kWh) next month from Rp 150.06 at present,
with the tariff for road lighting increasing at the highest rate,
11.11 percent.
The new rates maintain a cross-subsidy mechanism, allowing
small consumers to enjoy subsidies from large-scale subscribers.
"The tariff increase is important for PLN to raise funds for
the power projects it requires to meet increasing demand,"
Sudjana said in yesterday's meeting, which was attended by
Secretary General of the Ministry of Mines and Energy Umar Said,
Director General of Electricity and Energy Development Artono
Arismunandar and PLN's president, Zuhal.
Sudjana explained that PLN, whose status has been changed to a
profit-oriented and independent firm, will need Rp 12 trillion
($5.49 billion) per annum to finance the construction of new
power stations and distribution facilities, whereas its financial
capability is limited.
"PLN is supposed to build new power stations with a total
capacity of 9,500 megawatts (MW) in the coming five years," he
said.
PLN usually finances its power projects with its own equity,
government investment as well as foreign and domestic loans.
Sudjana said increasing PLN's financial capability is
important because the government's financial resources will
decline.
Sudjana said that the tariff adjustment, made after the latest
increase in February of last year, was calculated on the basis of
the one-year impacts of inflation, depreciation of the rupiah,
increases in fuel prices and electricity charges provided to
privately-run power generators.
"Three months after the November hikes, PLN will further
adjust the tariffs," he added.
Arismunandar estimated regular adjustments every three months
would likely need an increase of only around 0.10 percent or 0.25
percent.
"It is very possible that after a certain three-month period,
tariffs will not rise if inflation, rupiah depreciation, fuel
price developments and the private electricity charging do not
hurt PLN's performance," he said.
He said that PLN's regular adjustment of electricity tariffs
will be strictly supervised by a team from the Ministry of Mines
and Energy and will need approval from President Soeharto.
Tariffs
Arismunandar said that the highest increases in billing rates
is set for public lighting facilities, middle-class households,
social institutions, hotels and some small-scale industries.
He explained that the tariff for the public lighting
facilities will increase by 11.11 percent to Rp 165 per kWh, for
middle-class households (with a capacity of between 501 volt
amperes (VA) and 2,220 VA) by 9.96 percent to Rp 154.61 and for
middle-class households by 9.87 percent to Rp 127.32.
Social institutions will face an increase of 9.86 percent to
Rp 183.46 per kWh.
Tariffs for small-scale industrial plants with electricity
utilization of between 14 kVa and 200 kVa will increase by 8.64
percent to Rp 175.82 per kWh.
Impacts
Both Sudjana and Arismunandar assured that the tariff
adjustment will not hit the country's industries because the
planned electricity tariff hikes are relatively small.
"A 10-percent increase in electricity tariffs will have an
impact of only about 0.25 percent on inflation," Sudjana said.
He said increases in electricity tariffs will also encourage
subscribers to consume power more efficiently.
Zuhal, meanwhile, said that the planned 7.68 percent increase
will enable the company to raise a fund of Rp 240 billion in the
coming five months.
"I should also caution that our electricity tariffs, which are
estimated at Rp 152.50 per kWh, are the lowest in Asia," he
added.
The Philippines, for example, charges Rp 225.42 per kWh,
Singapore Rp 161.68, Thailand Rp 158.51, Malaysia Rp 159.41, Hong
Kong Rp 181.82 and Taiwan Rp 170.41 per kWh, he said. (fhp)