Poor to be hit hardest by power price hike
Moch. N. Kurniawan and Tantri Yuliandini, The Jakarta Post, Jakarta
Low income households will have to pay on average a whopping 15 percent increase in electricity rate every three months next year, while rates for high-income families will only increase by an average of 8 percent during the same period, under the new electricity rates proposal announced by the government on Wednesday.
The increase in electricity rates for low-income households is the largest in the new power-pricing scheme.
Luluk Sumiarso, director general of electricity and energy utilization at the Ministry of Energy and Mineral Resources said that despite the hefty increase, power prices payable by low- income households next year were still lower than the production costs of state electricity company PT PLN.
"Although low-income customers will pay the largest increase, the prices will still remain affordable in nominal terms," Luluk said.
He also noted that most low-income families living in houses with an installed power capacity of between 250 voltampere (VA) and 450 VA had been exempted from increases in electricity rates over the past two years.
The new pricing scheme, if approved by President Megawati Soekarnoputri, will come into force in January next year.
Luluk said the pricing scheme was based on the agreement reached by the House of Representatives and the government last month to increase electricity rates by an average of 6 percent every three months next year.
Under the plans, electricity rates for households with an installed power capacity of 250 VA would jump by 16 percent in the first quarter, 15 percent in the second quarter, 15 percent in the third quarter and 12 percent in the fourth quarter.
A 250 VA power capacity is enough for a household to switch on several lamps at night but the family has to switch off several lamps in order to switch on their television set.
Rates for households with an installed capacity of 450 VA would increase by 15 percent, 16 percent, 18 percent and 19 percent in each quarter respectively.
With a 450 VA power capacity, a family can use their television sets and lamps at the same time, but they can't use other electronic devices, such as iron.
Rates for middle-income households with an installed power capacity of 2,200 VA will increase by 8 percent in the first quarter, 9 percent in the second quarter, 8 percent in the third quarter and 7 percent in the fourth quarter.
This group of customers can use their television set, home computer, freezer and air conditioner at the same time at night.
Rates for small industrial customers would increase by an average of 7 percent for every three months next year, while large companies have to pay a 4 percent increase during the same period.
PLN's finance director Parno Isworo said the hike would enable PLN to receive another Rp 10 trillion (US$956 million) in revenue next year, but the cash-strapped company would still suffer losses of about Rp 1 trillion.
Indah Sukmaningsih, chairwoman of the Indonesian Consumers Foundation (YLKI) blasted the new pricing scheme, saying it was unfair that the salaries of customers would not increase correspondingly every three months next year.