Tue, 13 Jul 2010

From: The Jakarta Globe

By Arti Ekawati
Manufacturers are up in arms over the recent electricity rate hikes, with some saying their rates have doubled and accusing the Energy Ministry and state utility PT Perusahaan Listrik Negara of deceiving them about the true extent of the increase.

Franky Sibarani, secretary general of the Indonesian Employers Association (Apindo), told the Jakarta Globe that some industries faced a doubling of their rates and others of at least 55 percent.

The ministry last month issued a decree, with the approval of the House of Representatives, which superseded a 2003 presidential decree and authorizes PLN to raise electricity rates on affluent households and industries by 10 percent to 18 percent.

Businesses had argued for a 5 percent hike.

The rate rises took effect on July 1, and most businesses have yet to receive their first bills after the adjustment.

But Franky and others say the new decree actually sets electricity rates much higher than advertised.

Under the old presidential decree, industries using 2,200 volt-amperes to 14 kilovolt-amperes were charged Rp 455 (5 cents) per kilowatt hour.

But Franky said the new ministerial decree sets the rate at Rp 915. “It’s more than a 100 percent increase,” he said.

The tariff for those using 14 kVA to 200 kVA has been raised from Rp 440 per kilowatt hour to Rp 800, an increase of 81 percent.

Those using more than 200 kVA will see their rates rise from Rp 439 per kilowatt hour to Rp 680, a 55 percent hike.

Agus Triboesono, director of business electricity supervision at the ministry, rejected the industries’ claims, insisting that the hikes would only be an average of 10 percent, although he offered no details.

PLN officials could not be reached for comment.

Eddy Widjanarko, chairman of the Indonesian Footwear Association (Aprisindo), said apprehension over the rates had forced foreign companies to reconsider, or at least put on hold, their plans to relocate here from Taiwan and China.

“The investors will wait until there is certainty on the electricity tariff,” he said.

Franky said businesses had already passed on their concerns to the ministries of industry and trade, and asked the government to put the increase on hold until its effect on industrial users could be determined.

He also questioned the legality of the ministerial decree since it was used to annul a presidential decree. Agus said it was perfectly legal but did not elaborate.

Industry Minister MS Hidayat on Monday said he was surprised by the reports of the steep increases.

He did not say whether it was possible to rescind the rate hike, but said he would discuss the issue with the Coordinating Ministry for the Economy on Tuesday.