PLN asked to reevaluate new tariff structure proposal

The government has asked state owned electricity company to change the proposed tariff structure because the average tariff increase under the new tariff structure reaches 6.7 percent per three month or above 6 percent as initially approved, Suara Karya reported on Monday.

Director General of Electricity and Energy Use in the Ministry of Energy and Mineral Resources, Luluk Suniarso, said in Jakarta on Saturday that under PLN?s new tariff structure, the increase for connections of 450 VA reached 12 percent exceeding the maximal level of 10 percent.

The increase in the tariff for connections of 900 VA also reached 15 percent or above the allowable level of 13 percent, and that for 2000 VA reached seven percent or above the maximum level of five percent, Luluk said.

The average increase in the electricity tariff exceeded the maximum level of six percent approved by the government because the operating cost of PLN?s information technology (IT) subsidiary was also included in the electricity company?s overall operating expenses, he said. "It means that the cost of PLN?s IT subsidiary should be borne by the people," he added.

PLN?s President Director Eddie Widiono earlier said that the electricity company had proposed a tariff increase of up to six percent quarterly to ensure that the electricity tariff would reach its economically feasible level of seven U.S cent per kilo watt hour (kWh) in 2005.

At present, the government has to subsidize the electricity supply as PLN?s selling price is still far below the production cost. (*)