PLN must obtain House approval for industry rate hike: Minister

The Industry Ministry has slammed a decision by state-run electricity giant PT PLN to increase electricity rates for industry, saying the firm should have obtained approval from the House of Representatives before applying the changes.

Industry Minister M. S. Hidayat said Monday that PLN could not increase the cap on the rate increases because electricity rate changes required government approval.

“The government’s policy is that [prices] can not be set just like that [by PLN], but they need to conduct talks with the House of Representatives.

“PLN rates are regulated, so this is not a decision for the corporation to make on its own,” Hidayat told reporters after a meeting at the Coordinating Economic Ministry in Jakarta.

Businesses and PLN have been at odds over a recent decision to lift a cap on increases to industry electricity rates.

The cap, at 18 percent, which came into effect in July 2010, was lifted recently, increasing the industrial electricity rates by between 20 and 30 percent.

PLN president director Dahlan Iskan said those who were reluctant to adopt the new rates were “spoiled”, sparking controversy.

Meanwhile, Hidayat said “it’s OK to be spoiled, but not for too long”.

“As a minister with entrepreneurial background, I understand businesses need to be advised at least one year before new rates are introduced so they can make necessary adjustments,” the former Indonesian Chamber of Commerce and Industry (Kadin) chairman said. (est)