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No general power tariff increase until after 2009, official says
The government guarantees there will not be a general increase in power rates until after 2009, despite possible ballooning of the budgeted power subsidy with increasing crude oil prices
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The government guarantees there will not be a general increase in power rates until after 2009, despite possible ballooning of the budgeted power subsidy with increasing crude oil prices.
Director general for electricity and energy utilization at the Energy and Mineral Resources Ministry, J. Purwono, said Monday that government preferred that state power utility PT PLN focus on charging wealthy people with non-subsidy rates.
Currently, PLN bills consumers with wattage limits above 6,600 watts with non-subsidy rates.
The policy was implemented earlier this year after the government announced spending on the electricity subsidy had tripled to Rp 60.28 trillion (US$6.5 billion).
As oil prices continue to rise, power subsidy costs could reach Rp 68 trillion this year, prompting suggestions that the company might raise power rates.
However, Purwono would rather that PLN expand the coverage of non-subsidy rates rather than increasing general rates.
"Expand the target for those who use electricity excessively, especially rich households," Purwono said.
The last time the government increased general power charges to consumers was in 2003.
Purwono hoped that by applying this policy, PLN could save up to Rp 8.1 trillion this year. The saving "could be more" should the company charge all consumers using 2,200 watts or more with non-subsidy rates.
Purwono's remarks came while PLN was seeking solutions to help it maintain operations, including options to raise rates.
PLN president director Fahmi Mochtar said recently that raising the electricity rate was "one of the possible scenarios" to help the company offset higher operating costs.
PLN forecasts that it will suffer an additional Rp 500 billion loss every time the oil price increases by $1 per barrel.
Oil-based fuels fire 35 percent of PLN's power plants, with the rest mostly being coal and natural gas.
