Government proposes two scenarios in new electricity tariffs

The government has proposed two scenarios of new electricity tariffs to members of the House of Representatives (DPR) which are expected to make a decision this week whether or not to increase the electricity tariffs, Republika daily reported on Thursday.

According to documents obtained by the newspaper from the technical team for the power tariff, the two power tariff scenarios are all based on the assumption of operating costs of Rp 93.2 trillion, margin of 1.5 percent and revenue target of Rp 99.6 trillion, with a subsidy of Rp 17 trillion.

In the first scenario, the government will not increase the power tariffs. For this, the government should provide additional subsidy of Rp 11.6 trillion on the top of Rp 17 trillion already allocated in the state budget to PLN. In this scenario, PLN is expected to receive revenues of Rp 66 trillion.

The second scenario proposes an increase in the electricity tariff by 10 percent. In this price scenario, the government will only provide additional subsidy of Rp 6.7 trillion, and PLN's revenue is expected to reach Rp 70.9 trillion.

According to the document, the increase will be imposed only on medium and large scale household customers, large-scale businesses, medium-size and large-size industries, large-scale social organizations and the government. (*)