Govt finally raises power tariff by an average of 10%

Alfian, The Jakarta Post, Jakarta | Wed, 06/16/2010 10:43 AM | Business
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The government and legislators finally agreed to broad increases in the electricity tariff but made an exemption for low-income customers.

The agreement was reached at a hearing on Tuesday by the Energy and Mineral Resources Ministry and the House of Representatives Commission VII that oversees energy and mining.

“Commission VII and the government have agreed to raise the power tariff by an average of 10 percent, but customers who have an [installed power capacity] between 450 and 900 volt-amperes [VA] are exempt from the increase,” Energy and Mineral Resources Minister Darwin Zahedy Saleh told reporters after the hearing.

The new power tariff will be officially stipulated in a presidential regulation expected to be issued by the government as soon as possible. “The new tariff will take effect on July 1,” Darwin said.

The increase, which will range from 6 to 20 percent, applies to customers outside 450-900 VA range.

The power tariff for houses that use 1,300 to 5,500 VA will increase by 18 percent, while the tariff for the commercial buildings with a similar power capacity will increase 16 percent.

The government will not increase the power tariff for houses that use more than 6,600 VA or higher.

Those customers currently pay subsidized prices only when their consumption is lower than 30 percent of the average national consumption in that category.

Data from state utility firm PT Perusahaan Listrik Negara (PLN) shows that those customers
have paid commercial prices for power. The same policy applies for commercial buildings that use between 6,600 VA to 200 kilo volt-amperes (kVA).

The tariff for commercial buildings — such as private company offices, malls, and hotels — with an installed-power capacity greater than 200 kVA will increase 12 percent.

The power tariff increase will be 6 percent for manufacturing customers who use between 1,300 and 2,200 VA; 9 percent for customers who use between 2,200 VA to 200 kVA and 15 percent for customers who use more than 200 kVA. After the new tariff is implemented, existing manufacturing power-consumption penalties would be scrapped, Darwin said.

“We will simplify power tariffs for the industry,” he said.

The government and the House agreed to raise the tariff to offset an estimated 4.8-trillion electricity-subsidy budget deficit this year.