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Jakarta Post

PLN to waive minimum fees to expedite recovery

The fees will be scrapped for 400,000 such entities for power consumed between July and December.

Norman Harsono (The Jakarta Post)
Jakarta
Tue, August 4, 2020

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PLN to waive minimum fees to expedite recovery

T

he government has ordered state-owned electricity giant PLN to waive minimum monthly electricity fees for businesses, industries and public services to expedite Indonesia’s economic recovery.

The fees will be waived for 400,000 such entities for power consumed between July and December. The deductions will be reflected in bills in the following month. The electricity giant will be compensated by the government with funds from the state budget.

PLN and the government are drafting regulations to implement the relief scheme, which had been requested by businesses themselves, said Energy and Mineral Resources Ministry Electrification Director General Rida Mulyana on July 30.

“Some businesses told PLN and the government, ‘Pak, I have no work right now. It’s all closed. I'm using less than 40 hours of electricity. I just want to pay for 20 hours,’” Rida said during an online press briefing.

Existing regulations require PLN’s business, industrial and public service customers in or above the 1,300 volt-ampere (VA) category – medium to big enterprises – to pay for at least 40 hours of electricity each month, even if they do not make use of it.

In comparison, similar customers within the 900VA category – small enterprises – have to pay a fixed  amount per month. PLN will also waive these fees.

“Customers will only pay for the kilowatt hours [kWh] they use,” said PLN spokesman Agung Murdifi in a statement on Jul. 30.

Erasing electricity bill minimums is the third power-related relief scheme introduced by the government to protect Indonesians from the economic downturn resulting from the COVID-19 pandemic.

The government previously ordered PLN to waive or halve the power bills of Indonesia’s 24 million poorest households and to provide free electricity to 500,000 small businesses that fell in the lowest 450 VA category.

Indonesian business players have demanded the government to provide an additional stimulus package of Rp 625.1 trillion (US$44.6 billion) in working capital to help them cope with pandemic-induced economic strains, the Indonesian Employers Association (Apindo) said in June. 

The government has allocated Rp 695.2 trillion in funds for healthcare and economic stimulus spending to cushion the impact of the outbreak.

The business players association also demanded the stimulus be disbursed over the course of a year, and also requested relaxation of electricity and gas payments to help cut the businesses’ operational costs.

For businesses and industries above the 450 VA category, fixed costs such as power bills have strained their finances as spending remained high while revenues fell, said Indonesian Employers Association (Apindo) deputy chairman Bob Azam.

He said hotels’ power bills made up roughly half of their fixed costs during the pandemic. The other half was from employee compensation.

“If we have more flexibility, maybe we can survive a little longer,” he told The Jakarta Post.

The relief program is expected to halve the entities’ combined six-month power bills, totaling Rp 5.6 trillion with the minimums included, said Coordinating Economic Minister Airlangga Hartanto on Jul. 27.

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