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tate electricity firm PT PLN has recommended the government to revise the 2010 ministerial decree on basic electricity rates if a cap on a power tariff hike for industries remains in place.

PLN business and risk management director Murtaqi Syamsudin said Friday that as an executor of government policies his company needed a clear legal basis to avoid problems that appeared to be caused by an excess of government policies.

“The government and House of Representatives may make political decisions, but for us the most important thing is that they materialize their decisions into clear legal instructions,” he told reporters after a discussion with representatives of several industry associations in Jakarta.

The electricity rates for industries have recently been in legal limbo since PLN announced it would lift a cap on power rate increases in early January.

Through a ministerial decree, the Energy and Mineral Resources Ministry introduced new power rates
in mid 2010. Business owners slammed the change, as calculations showed they would experience increases in power costs of between 20 and 30 percent.

As a compromise, the government and the House agreed to cap the tariff increases at 18 percent, as of July 2010.

Murtaqi said that the price disparity caused by the implementation of the cap had put PLN in a difficult legal position.

“The Business Competition Supervisory Commission [KPPU] is now investigating PLN over indications of breaching the 1999 anti-monopoly and anti-unfair business competition,” he reported.

According to the company’s data, only 25 percent of industrial customers enjoyed the benefits of the cap. Industrial customers on average pay Rp 758 (8 US cents) per kilowatt an hour (kwh), while those with the cap paid only Rp 674, a price disparity that could hamper fair competition among industries.

“We’re waiting for the commission’s decision. That will be our legal basis in deciding whether to lift or maintain the cap,” said Murtaqi.

On Wednesday, a hearing session between the Energy and Mineral Resources Ministry and the House’s Commission VII mandated the ministry to reject PLN’s request to remove the cap until the three institutions met up and conducted a comprehensive discussion on that matter.

The Indonesian Shopping Centers Association (APPBI) secretary Ellen Hidayat told the discussion that electricity rate disparity had severely hurt competition among shopping center managers.

“A member of our association reported that the disparity had cost his company Rp 44 billion in financial losses,” she said.

PLN has been applying equal tariffs on all shopping centers since October 2010. Previously, PLN applied higher tariffs for malls established from 2008 due to a power-supply shortage.

The Real Estate Indonesia head of advisory body Teguh Satria praised PLN’s performance over the past several years. He said that he would support all efforts aimed to improve the company’s service quality, including if the company raised the power rates.

“Since Dahlan Iskan holds the top position in the company, many changes may take place. He can fulfil his promise to stop bureaucracy hindering the process of new-connection applications,” he said.