PLN has enough operating funds for next year

State electricity firm PLN will be able to cover its operating costs next year although it had not raised power rates for the October-December period of this year, its official said Thursday as reported by Detik.com.

The company currently has around Rp11 trillion (US$=Rp8,370) in depreciation fund, which can be used to finance the operation of its plants, company president director Eddie Widiono was quoted as saying.

?The greatest portion of the fund will be spent on the maintenance of power plants and generators,? he said.

Normally, PLN uses 30 percent of its depreciation funds for new investments, Eddie said.

The government decided to delay its plan to raise power rates for the October-December period this year after the rupiah strengthened and due to its determination to help ease the burden of the poor people.

PLN said however that it would lose Rp800 billion this year due to the decision not to raise power rates for the fourth quarter.

The government actually had allowed PLN to raise power rates by an average of 6 percent each quarter since early last year until 2005. It is expected by 2005, the average rates could reach 7 U.S. cents per kilowatt-hour (kWh), which is seen as the level profitable for a power company to operate.

The current average power rate is 6.79 U.S. cents per kWh.

Many parties had protested the government?s power price policy, and had urged the government to delay its plan to raise power rates for the October-December period.

Meanwhile, Eddie said many foreign investors had questioned the government?s decision not to raise power rates. (*)