S

tate electricity utility PT PLN has set an ultimatum for its industrial customers to comply with the company’s new tariff policy if they want to continue receiving power.

PLN commerce division head Benny Marbun said in Jakarta on Tuesday the new tariff for industries were effective from January as originally planned.

This meant that beginning February all the companies’ industrial customers would have to pay their monthly bills using new power tariffs, he said. Otherwise, their power supply would be disconnected.

Early in January, PLN removed the price cap to limit the price increase for industrial users introduced in July, last year. The removal of the price cap, which has resulted in an increase in the power tariff by between 2 percent and 12 percent, has angered business owners.

As widely reported, the Energy and Mineral Resources Ministry issued a ministerial decree in June last year allowing PLN to raise the electricity tariff for industries by between 20 percent and 30 percent.

As the increase sparked nationwide protests, the government and the House of Representatives later agreed to cap the increase at only 18 percent. PLN previously claimed that based on the agreement, the cap would be lifted in January this year.

“We’re going ahead with our plan to lift the cap on a power tariff hike for industries, because as of today, we haven’t received any legal instruction from the government on that matter,” he told a press briefing at his office in Jakarta.

He said that as an operator of the government’s policies, his company should comply with prevailing laws and regulations in running its businesses. The increase in the power price will also determine the amount of the subsidy that has to be given by the government to PLN, he said.

The 2011 State Revenues and Expenditures Budget law, for example, stipulates that PLN will receive Rp 40.7 trillion (US$4.5 billion) in subsidy if it applied power tariffs based on the ministerial decree, he added.

“If the cap remains in place, the government has to raise the subsidy,” Benny said.

According to PLN, only 25 percent or 9,771 of 38,449 industrial customers enjoyed the cap. The implementation of the cap was estimated to reduce the company’s revenues by Rp 1.8 trillion, he continued.

“If we continuously apply the cap it would not be fair for most of the industrial customers. We’re afraid of breaching the business competition law,” he said.

PLN data, if calculated based on the ministerial decree, shows that the average tariff paid by industrial customers is Rp 729 per kilowatt per hour (kWh). However, industries enjoying the cap pay only Rp 715 per kWh.

Indonesian Employers Association deputy secretary-general Franky Sibarani declined to comment on PLN’s maneuver, saying that he would wait for the government’s decision on the cap removal issue.

“Until Feb. 20, anything can happen,” he told The Jakarta Post in a telephone interview.

Golkar Party legislator Satya W. Yudha criticized PLN for lifting the cap without the House’s approval. He said that the company did not respect agreements made by the House, the government and industries last year.

“PLN should consult with the House and the government first before applying such a policy,” he said.

The House would meet with PLN and the government in the near future to decide the fate of the cap, he reported.

Earlier, House Commission VII overseeing energy has instructed the Energy and Mineral Resources Ministry to reject PLN’s request to remove the cap.