PLN to save up to Rp 474 billion from nonsubsidized tariffs policy

The Jakarta Post ,  Jakarta   |  Wed, 05/07/2008 9:39 AM  |  Business

State power company PT PLN said on Tuesday it would continue applying nonsubsidized tariffs to higher income consumers and businesses, claiming the move would save about Rp 474 billion (US$43.4 million) this year in Java and Bali alone.

PLN president director Fahmi Mochtar said during a seminar the company had saved Rp 1.3 billion per day for a month following the introduction of its policy of nonsubsidized tariffs.

He said during this period the peak electricity load had dropped by 200 megawatts in the Java-Bali power grid from the normal 15,800 MW to 15,600 MW.

"We hope the power consumption level can be controlled further with this policy," Fahmi said.

PLN began charging nonsubsidized tariffs to customers with an electricity capacity of more than 6,600 MW in April in the hope of reducing the company's soaring operating costs due to the rise in the price of oil.

PLN operates power plants with a total capacity of 29,705 MW. Almost 30 percent of these plants run on oil-based fuels.

The nonsubsidized tariff program has been implemented in Riau, West Java, East Kalimantan, Bangka Belitung, Jakarta and Tangerang.

The move is part of PLN's cost-cutting measures to save about Rp 2.7 trillion this year to help offset the deficit of almost Rp 5 trillion for the electricity subsidy.

The government allocated Rp 60.3 trillion for the subsidy, against a projected spending of Rp 65 trillion.

PLN also plans to distribute 51 million units of energy-saving lamps to the public by July.

This program aims to cut operating costs by a further Rp 1.52 trillion.

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