PT PLN to lose $287m despite rate increase
PT PLN to lose $287m despite rate increase
JAKARTA (JP): State electricity company PLN projects a loss of
Rp 2.3 trillion (US$287 million) this year despite the huge
increase in electricity tariffs, the company said yesterday.
Company president Djiteng Marsudi said the new government-set
rate was projected to increase PLN's revenues to Rp 20.8 trillion
this year, from Rp 11.13 trillion last year.
But these could only cover 90.13 percent of the company's
production costs, he added.
"We would still suffer a loss of about Rp 2.3 trillion this
year at the exchange rate of Rp 6,000 per U.S. dollar," Djiteng
told a press conference.
The company had earlier projected a loss of Rp 11.37 trillion
this year contingent on no increase in the tariff.
On Monday, the government increased fuel and electricity
prices to reduce mounting subsidies.
The electricity price was increased by an average of 20
percent, to Rp 233.59 from Rp 194.74 per kilowatt hour (kwh),
starting this month. The government will raise the tariff again
by 20 percent in August and another 20 percent in November.
The power tariff will average Rp 280.43 per kwh in August and
Rp 336.52 per kwh in November.
After November, PLN will further raise power tariff on a
periodic basis every three months, but the increase "will be
moderate", Djiteng said.
The government is allowing low-income households to apply for
a special rate similar to that applied for non-profit
organizations.
Djiteng said the new rates applied a cross-subsidy scheme in
which the tariff applied to the poor was raised less than 20
percent, while the tariff for affluent households was raised more
than 20 percent.
Cost
Djiteng promised to further improve PLN's efficiency to reduce
unnecessary costs.
He conceded that the company was in financial difficulty
following the rupiah's sharp depreciation against the dollar over
the past 10 months.
PLN gets revenue in rupiah, but it pays several components of
productions in dollar, including fuel (gas, diesel fuel,
geothermal), power supplied by the Independent Power Producers
(IPPs), spare parts and loan installment, Djiteng said.
PLN data projects the company will spend this year $590
million to buy gas, $400 million to buy electricity supplies from
IPPs, $79 million to buy geothermal energy from the contractors
of state oil and gas company Pertamina, $288 million to purchase
spare parts and another $103 million to service its debts.
It buys gas from the ARBNI and ARII, the Indonesian subsidiary
of America's Atlantic Richfield Co. (ARCO), Kodeco of South
Korea, the state gas distributor PGN and Exspan of the Medco
Group, at prices between $2.45 and $3 per million British thermal
units.
PLN has signed 26 power purchase agreements with IPPs but only
two have come on stream, including the Sengkang combined cycle
power plant in South Sulawesi, and the Salak geothermal power
plant in West Java.
Two other private generators are scheduled to come on stream
this year, including the Dieng geothermal power plant in Central
Java and the coal-fired Paiton I power plant in East Java.
The Dieng power plant, owned by a consortium led by CalEnergy
of the United States, will come on stream in several weeks, while
the Paiton I power plant, owned by the consortium of PT Paiton
Energy Co., is set for November. (jsk)