Power Rates to Increase?

(1/22/2006)

The Indonesian language daily Kompas reports that the Government has given the State Electricity Board (PLN) permission to increase electrical tariff by a maximum 7% in order to compensate the power producer for recent increases in fuel costs. The permission to increase electrical costs is conditional PLN’s next financial report showing that the Sate-Owned electrical board continues to run an operating loss.

Indonesia's Director General for Electricity and Energy Use from the Department of Energy and Mineral Resources, Yoga Pratomo, said, "We will see the extent of the effect of the increase in fuel costs on the cost of producing electricity." Yogo emphasized that his main concern is to ensure that Indonesian consumers obtain an electrical tariff that is not overly-burdensome and is fair.

Current PLN budgets allocate 25% of all expenditures for fuel purchases.

Indonesia’s Power Tariffs Among ASEAN’s Highest

Data released by the Indonesian Consumer’s Council (YLKI) shows that among the basic rate charges for electricity in ASEAN, Indonesia ranks among the highest, second only to the Philippines.

That report revealed the following basic costs for one kilowatt hour of electrical power:

• The Philippines 7.3 cents (US$) per KWH

• Indonesia 6.5 cents (US$) per KWH

• Malaysia 6.2 cents (US$) per KWH

• Thailand 6 cents (US$) per KWH

• Vietnam 5.2 cents (US$) per KWH

Will PLN Ask For Higher Increases?

While PLN has yet to make a formal request for the authority to increase its rates, one model put forth by the office of the Coordinating Minister for the Economy would increase household electrical tariffs between 83-90% and business energy costs by 100%. That same model increase rates for small households with minimum power consumption by 7%.