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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