Govt to hike electricity tariffs

Govt to hike electricity tariffs

JAKARTA (JP): The government yesterday confirmed its plan to
increase electricity billing rates by around three percent next
month.

"We will hold a meeting with leaders of Commission VI of the
House of Representatives (DPR) this week to seek their support
for the planned tariff increase," Minister of Mines and Energy
I.B. Sudjana announced yesterday after opening a workshop on
power generation.

The workshop was attended by visiting British Minister of
Trade Richard Needham and executives of some 40 British
companies.

Sudjana said an increase in electricity tariffs is necessary
for the state electricity company PLN to cope with inflation,
depreciation of the rupiah and increases in fuel prices.

Electricity billing rates are determined by the government
through a decree by the Minister of Mines and Energy.

Director General of Electricity and Energy Development Artono
Arismunandar, without showing any figures, assured that
Indonesia's electricity rates will remain the lowest in the
region even after the planned hike.

Sudjana said the government also plans to adjust electricity
tariffs every three months in line with developments on fuel
prices, depreciation of the rupiah and the country's inflation.

Projects

Director General of Electricity and Energy Development Artono
Arismunandar said on Tuesday that the increase is urgent for PLN
to enable it to finance its power generation and distribution
projects.

"You can imagine that PLN will need some Rp 45 trillion to
finance generation and transmission projects in the coming five
years," he said at a seminar on infrastructure.

Both Sudjana and Arismunandar said that the government will
maintain its policy of setting different electricity billing
rates for industry, commercial entities and households.

"It means that the cross subsidy among subscribers will be
maintained," Sudjana said yesterday.

Minister of Industry Tunky Ariwibowo announced after meeting
with President Soeharto yesterday that the planned electricity
tariff hike will not hit the country's manufacturing industry
because electricity's contribution to production costs is mostly
small.

Aburizal Bakrie, chairman of the Indonesian Chamber of
Commerce and Industry (Kadin), announced yesterday that the
planned tariff rise will not affect exporting firms because it
can be compensated by the steady appreciation of the U.S. dollar
against the rupiah.

However, he suggested that the government adjust electricity
tariffs every six months, instead of every three months. (fhp)

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