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New electricity price formula may cause price increase: Official
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A PLN technician checks electricity meters on Nov. 15, 2017, at a low-cost apartment building in Daan Mogot, West Jakarta. (JP/Bangkit Jaya Putra)
T
he government plans to introduce a new electricity price formula, which will take into account the coal reference price (HBA), by March at the latest in an effort to ease the financial burden on state electricity firm PLN.
At present, the Energy and Mineral Resources Ministry sets the electricity price formula for PLN’s non-subsidized customers by taking into account changes in the exchange rate between the US dollar and rupiah, Indonesian Crude Price and inflation.
However, the ministry plans to add HBA as a new component in the formula following the rapidly-increasing portion of coal-fired power plants in the country’s power generation.
“We’ll introduce the new formula through the issuance of a new ministerial decree,” the ministry's electricity director general Andy Noorsaman Sommeng said on Monday. “The decree might be issued next month or in March.”
As of 2017, Indonesia operated various power plants with a total capacity of 60,491 megawatts, of which 57.22 percent were coal-fired facilities. Therefore, any increase in global coal prices will present a major burden for PLN.
Andy acknowledged the issuance of the new formula might lead to an increase in electricity prices for PLN’s non-subsidized customers. However, such an action was needed to ease PLN’s burden, he added.
“One thing is for sure, it’s impossible for us to keep distressing PLN. If PLN is in trouble, the country will see no light,” he said.
PLN saw its net profit fall by 72.2 percent year-on-year to Rp 3.04 trillion between January and September 2017. (bbn)
