PLN raises power rates by 17.47%

JAKARTA (JP): The government has allowed state electricity company PT PLN to raise power rates starting on Sunday to help ease the state company's financial difficulties.

PLN's president Eddie Widiono told reporters on Saturday that PLN was allowed to increase its power rates by an average of 17.47 percent this year. This would be carried out by the state company in two phases, that is this month and in October.

He did not, however, specify the percentage increase for this month.

PLN president said all rates would be increased, except those for poor households, small businesses, or social institutions, provided they had an installed power capacity of 450 volt-amperes (VA) and a maximum consumption of 30 kilowatt-hours (kWh).

"The government has decided to keep power prices for these types of costumer unchanged," Eddie said, adding that these customers totaled 19.3 million, or 67 percent of PLN's total 28.9 million customers.

Eddie said that under the new pricing scheme, rates for households with an installed power capacity of 900 VA, which consume between 60 and 250 kWh, would jump by between 22.3 percent and 62.9 percent, starting in July.

The rates would once again increase between 11.8 percent and 20.6 percent in October, he added.

Rates for household customers with an installed capacity of 2200 VA, consuming between 450 and 1,050 kWh, would increase between 33.9 percent and 35.9 percent in July and rise again by between 9.7 percent and 12.9 percent in October, he said.

Households with an installed capacity of 4400 VA, consuming between 600 and 1,300 kWh, would pay a rate increase of between 23.8 percent and 24.8 percent in July, with another increase of between 12 percent and 13.1 percent in October.

Rate increases for industrial customers would range between 13.8 percent and 14.6 percent in July, and 3.6 percent to 4.2 percent in October, Eddie said.

Rates for businesses would also increase, but rates for public road lighting would decrease, he said, without further elaboration.

PLN's data says industrial customers accounted for about 42 percent of PLN's revenue, households about 40 percent, businesses about 13 percent, public facilities three percent and social institutions two percent.

Eddie said that the increases would enable PLN to obtain another Rp 2.3 trillion (about US$201 million) in revenue in the second half of the year but that, together with a subsidy of Rp 4.7 trillion promised by the government, would not be enough to cover its projected losses this year.

PLN would still suffer losses of about Rp 4.5 trillion at the end of 2001, despite the rate increases and the government's subsidy, he said.

The huge loss was because its sales would remain lower than its production costs, despite the tariff increases, Eddie said.

PLN, which was a profitable company prior to the economic crisis, has been suffering serious financial problems due to the sharp depreciation of the rupiah against the dollar since mid- 1997.

The state company sells its power in rupiah, but its costs are mostly in dollars, including the purchase of power from independent power producers. (05)