Govt delays power tariff increases for households

Govt delays power tariff increases for households

JAKARTA (JP): Minister of Mines and Energy Kuntoro
Mangkusubroto has ordered state electricity company PLN to delay
increasing power prices for households following mounting public
protests.

Kuntoro said yesterday that the delay in the tariff increase
was essential to protect low-income people.

PLN president Djiteng Marsudi said last night he would comply
with the instruction.

"We will comply with the order. As a matter of fact, the order
was made based on input from PLN," he told reporters at his
office.

Djiteng said PLN proposed to delay increasing power prices for
households following public protests over the extreme increase in
power prices.

"We are concerned about the safety of our employees who have
been threatened by the public because of the power price
increase. Some of our branches in Central and East Java have been
damaged or received threats of damage," Djiteng said.

Djiteng said the government had not decided for how long the
increase would be postponed.

The government has increased power prices by an average of 20
percent for June to August bills and will further increase prices
by an average of 18 percent for September to November bills and
by another 20 percent for December bills.

Tariffs for households using between 450 volt-amperes (VA) and
2,200 VA were raised by 37.7 percent to an average of Rp 206.22
per kilowatt hour (kwh) from Rp 148.61 per kwh.

However, many PLN customers claim their power bills have been
hiked 200 percent.

Households make up 72 percent or 18 million out of PLN's 25
million customers, but they contribute only about 30 percent of
the company's revenues which stood at Rp 11 trillion last year.

Kuntoro blamed the extreme increases in power prices on PLN's
poor billing system.

According to the minister, PLN hired contractors, mostly small
cooperatives, to record and calculate power usage from clients'
electricity meters at a commission of Rp 85 (0.5 US cents) per
client.

He said the small commission might have made the contractors
reluctant to send personnel to each meter to record the actual
power usage. Instead, the contractors usually estimated the power
usage based on as many clients as possible to obtain a huge
commission.

Kuntoro also called on the public to save power by using
energy-efficient equipment and not using electric appliances,
including televisions, freezers and air conditioners, at the same
time.

Djiteng admitted PLN hired cooperatives to record clients'
power usage, adding their commission was Rp 100 per client, not
Rp 85 as mentioned by Kuntoro.

"Maybe, some contractors have not yet fulfilled their jobs
well. We have yet to evaluate what really happens," Djiteng said,
adding that PLN would annul contracts with poorly-performing
contractors.

He promised to immediately improve PLN's billing system.

"We can improve it in two or three days. But it depends on the
government when the new prices will be reapplied," Djiteng said.

He said clients who had paid bills with increased prices this
month would get their money back when they went to pay their
bills next month.

PLN has been severely battered by the monetary crisis which
has been gripping the country since the middle of last year.

The rupiah's sharp depreciation against the U.S. dollar left
the company nursing a loss of Rp 500 billion last year.

The triple increases in power prices were expected to reduce
the company's losses from an estimated Rp 11 trillion to Rp 2.3
trillion this year. (jsk)