PLN to increase power charges for industry

PLN to increase power charges for industry

Leony Aurora, The Jakarta Post/Jakarta

State power firm PT Perusahaan Listrik Negara (PLN) will raise
electricity charges for industrial users during peak hours and
will impose penalties for over-quota power usage starting
September, raising concerns of higher costs in the industrial
sector.

PLN will raise the multiplier used between 6 p.m. and 10 p.m.
to 2 from the current figure of between 1.4 and 1.5 set for Java,
Bali, Sumatra, Kalimantan and Sulawesi, meaning that peak-time
electricity will be twice as expensive as that utilized during
off-peak times, the company's marketing and services director
Sunggu Anwar Aritonang said on Wednesday.

"The new multiplier will be effective as per September," he
told reporters after a meeting with industrialists. "We will
issue the decision as soon as possible."

The policy would be applied to firms that have power
utilization capacities of more than 14 kilovolt amperes (kVA), as
well as to government offices, charitable organizations and
businesses with capacities of more than 200 kVA.

On top of a higher multiplier, PLN will also impose a penalty
for electricity usage during peak hours that exceeds the set
quota, defined as half of each company's average usage.

The penalty, applicable only to the additional consumption, is
twice the rate used in peak hours, or four times the rate in
regular hours.

The Ministry of Industry's secretary-general, Agus Tjahayana,
said that industry players understood PLN's difficult position as
global oil prices soared and demand increased.

According to PLN, peak-hour demand surged after the government
hiked fuel prices in March, indicating that many companies
switched to using power generated by the state firm instead of
producing their own electricity.

In compensation for the higher multiplier, PLN will apply a
discounted tariff to companies that manage to shift more than 50
percent of their power usage in peak hours to off-peak hours,
Aritonang said.

Executive secretary of the Indonesian Textile Association,
E.G. Ismy, who attended the meeting, said it would be impossible
to shift electricity consumption to off-peak hours as the
industry worked around the clock.

Power contributed 30 percent of production costs for spinning
operations and 18 percent for weaving operations, he said.

"Fuel prices (for industry) have been increased, and now
electricity charges. How can we possibly compete with China?"
Ismy asked.

"The only way (to cut power usage during peak hours) is by
reducing production, which will mean laying off workers," Ismy
added.

Yos Rizal Anwar of the Indonesian Foundry Industries
Association said industry players would comply with the new
policy. "We will try to save energy and make use of the power
packages offered by PLN," he said.

Aritonang said that as PLN diversified its energy sources to
non-oil fuels, the new policy could be reviewed.

PLN generates electricity in a sequence, utilizing first
hydropower, geothermal energy, gas, coal and, lastly, the more
expensive oil if the power produced by the other types of power
plants proves to be insufficient.

Although oil-fired plants contribute only some 30 percent of
the country's total power capacity, petroleum accounts for nearly
70 percent of total fuel costs.

PLN has said that it will need 11.44 million kiloliters (kl)
of oil to generate power this year, higher than its quota of 8.35
million kl of subsidized fuel. State oil and gas firm PT
Pertamina has said that PLN may have to pay market prices for the
additional supplies.