After a one-month delay, state power firm PT Perusahaan Listrik Negara (PLN) announced Friday it would implement an "incentive-disincentive" program on electricity use next month.

Through the program, the firm will fine those exceeding national benchmarks by adding up to a 160 percent charge to the normal electricity tariff, and give a 20 percent discount to those consuming below the benchmarks.

There are five national benchmarks taken from average use of electricity consumption in 2007, one each for the five types of wattage limits for households.

Households with 450 watt and 900 watt limits must not exceed an average monthly consumption of 60 kilowatts per hour (kwh) and 92 kwh, respectively, or have their electricity tariffs increased by 30 percent.

Those with 1,300 watt limits will face a 35 percent tariff increase at usage greater than 158 kwh, those with 2,200 watt limits will face an 80 percent increase at usage greater than 283 kwh and those with wattage limits above 2,200 will see a 160 percent increase at use exceeding 127 kwh.

Newly appointed PLN director Fahmi Mochtar said in a press briefing at the company's headquarters the incentive-disincentive program was crucial to weather growing pressure from soaring oil prices.

In a step to encourage customers to save power, he said, the company will award 20 percent tariff discounts to households using less electricity than the national benchmarks.

Since first announced in February, the program has drawn a number of protests from lawmakers, analysts and the public, some of whom have called it a trick to increase revenues.

The accusation was rebuffed by the director general of electricity and energy utilization, J. Purwono, who said the policy was needed to ease the state subsidy for PLN, which was likely to increase from this year's original target of Rp 29.8 trillion to Rp 65 trillion.

With the government only able to allocate Rp 55 trillion for power subsidies this year, the company needs to start figuring out ways to make up the difference, Purwono said.

"That's why the company came up with this program, which has been approved by the government and discussed with the House of Representatives," he said.

The program is one among several PLN policies to keep the company's budget in check. In others, the PLN charges value-added tax for the use of electricity above 1,300 watts, and distributes energy-saving lightbulbs for free.

Household electricity consumption accounts for almost 90 percent of the country's total electricity consumption.

PLN Tariffs (per hour)

Average Household Wattage Limits Electricity Consumption

(kilowatts/hour)* 900 watt * 1,300 watt * 2,200 watt * ________________*__________*____________*____________* 0 - 20 kwh * Rp 200 * Rp 250 * Rp 250 * 20 kwh - 60 kwh * Rp 295 * Rp 335 * Rp 370 * Above 60 kwh * Rp 360 * Rp 405 * Rp 420 *

Above 2,200 watts will be charged Rp 380 per hour up to 60 hours and Rp 430 per hour beyond 60 hours.

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