PLN to raise electricity rates 7.78%

PLN to raise electricity rates 7.78%

JAKARTA (JP): State electricity company PLN will raise the
electricity tariff by 7.78 percent beginning next month through
July, the company announced yesterday.

PLN spokesman Alfian Helmy said the March-July rise was higher
than the increase in the previous three months due to the sharp
depreciation of the rupiah against the U.S. dollar during the
period.

Helmy said other factors had also prompted the tariff
adjustment including a surge in the inflation rate, an increase
in the prices of power purchased by PLN from independent power
producers (IPP), and an increase in the prices of fuel for PLN's
power plants.

"But, the rupiah's depreciation is the main factor
contributing to the increase in the tariff."

The government adjusts electricity tariffs periodically every
three months in line with changes in the four variables:
inflation rate, fuel prices, IPP's power prices and the rupiah-
dollar exchange rate.

"Under the existing formula, the new tariff is based on the
changes in the four variables during the July-September, 1997
period."

Helmy said the rupiah-dollar exchange rate during the July-
September, 1997 period -- that is the period when the monetary
crisis first hit the country -- was Rp 2,969 per dollar.

The rupiah started its sharp decline against the dollar in the
fourth quarter of 1997, and reached a trough at the rate of Rp
16,000 per dollar in the first quarter of this year.

Helmy said the next tariff for July through September this
year would be based on the exchange rate during the fourth
quarter of 1997.

The lower value of the rupiah in the October-December period
last year would certainly result in a greater increase in the
electricity tariff for the July through September period, he
said. (jsk)