Higher electricity tariff base studied
JAKARTA (JP): The Ministry of Mines and Energy is studying the possibility of increasing the electricity tariff base following the rupiah's sharp depreciation against the U.S. dollar, an official has said.
Director General of Electricity and Energy Development Endro Utomo Notodisuryo said Friday his office was making the study in line with the government's plan to raise the electricity tariff in the next few months.
"We are calculating the increase in the tariff base," he said, without revealing details.
The International Monetary Fund (IMF) and the government recently signed a 50-point agreement which among other things says the government will gradually eliminate subsidies on fuel and electricity.
The agreement also says the government will start adjusting fuel and electricity prices starting April 1.
The electricity tariff base, which is stipulated in a presidential decree, is used as the basis point for an adjustment in the electricity tariff.
The electricity tariff base is automatically adjusted every three months according to the country's inflation rate, fuel price, and the rupiah's exchange rate to the dollar.
An increase in the electricity tariff base will thus enable state-owned electricity company PLN to increase its tariff considerably.
The current electricity tariff base was set in 1994 at an average price of Rp 161.59 per kilowatt hour.
PLN has adjusted the electricity tariff nine times since.
The monetary crisis has severely affected PLN and the company has complained that the last increase in its tariff was not enough to compensate for its financial losses from the rupiah's depreciation.
PLN earns its revenue in rupiah, but pays fuel and maintenance costs and buys power from independent power producers in dollars.
PLN president Djiteng Marsudi has asked the government to increase the 1994 electricity tariff base so it could increase the tariff considerably to compensate for its losses.
PLN has projected Rp 1.3 trillion in losses this year. (jsk)