Amid intense opposition from lawmakers and analysts, the government decided Monday to postpone plans to introduce a new electricity billing system aimed at encouraging the public to use electricity more wisely.

The government would instead focus more on familiarizing the public with the plan before its official launch, Energy and Mineral Resource Minister Purnomo Yusgiantoro said.

State-owned power company PT Perusahaan Listrik Negara (PLN) had not applied the so-called 'progressive rate bill,' previously planned to take effect this month, Purnomo said.

"Under the President's instruction, we are to make preparations to ensure the program runs well," Purnomo said at a hearing with the House Commission VII for energy.

"We don't want a repeat of the kerosene conversion program fiasco," he added.

The government suggested PLN launch a pilot project in several places to measure the effectiveness of the system.

With global oil prices hovering above US$100 per barrel, the administration is already under pressure to ease the swelling power subsidy, which keeps the price of household electricity beneath international market prices.

Electricity for household use accounts for almost 90 percent of the total national electricity consumption.

Based on data from the Energy and Mineral Resources Ministry, the total estimated subsidy for electricity this year amounts to Rp 65 trillion (US$7.14 billion), more than double the previous estimate of Rp 29.8 trillion.

The higher subsidy is expected to drain funds intended for building infrastructure, schools and other public needs. It would also limit state firms' ability to expand since they would be forced to pay bigger dividend payments to the government.

The new billing system, which rewards households that can keep their 2008 electricity consumption at or below 80 percent of the 2007 national average (determined on the basis of "household groups"), was expected to see national power consumption drop by 20 percent.

At present, household groups are allocated 450, 900, 1,300 or 2,200 watts. Households whose consumption exceeds the 80 percent benchmark would be subject to penalties in the form of higher rates. Households consuming less electricity than the benchmark would get a 20-percent discount.

The new system is estimated to help the government save as much as Rp 10 trillion from its fuel subsidy.

During Monday's hearing, lawmakers were somehow opposed to the plan, saying it needed further study and approval from the House before it could be put into effect.

PLN president director Eddie Widiono, however, was concerned the delay would impact on the company's financial performance because of huge amounts of subsidy the company had to bear.

"We are hoping to speed up the public awareness program, to start the billing system in April," he said.

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