PLN local units may set their own tariffs

State electricity company PT Perusahaan Listrik Negara (PLN) has given authority to its local units to set their own electricity tariffs, together with local administrations and legislative councils, following the implementation of regional autonomy.

PLN president said that the freedom for PLN local business units to set their own tariffs should attract investment in electricity sector so that electricity supplies in the country would not be disrupted.

"Currently, our strategic business units (SBU) in Batam (Riau province) and in Tarakan (East Kalimantan) are working closely with local administrations to set new electricity tariffs according to their economical value," Kuntoro said at a hearing with the House of Representatives' Commission VIII in Jakarta on Tuesday (Feb. 6).

In addition, Kuntoro said that PLN business unit in Jambi was also moving toward that direction in an effort to tackle electricity supply problems in the area. PLN Jambi unit had even formed a joint venture with a number of investors to build a 350 MW power plant in Kerinci district.

"To solve problems of electricity supply, PLN is willing to cooperate with private investors as long as the electricity tariffs are adjusted and this must be supported by local administrations," he said.

In near future, Kuntoro said, PLN would form other business units in other areas such as Riau, Lampung, Bali and others. And those business units would have their freedom to set their own tariffs, together with local administrations and legislative councils.

"With the establishment of SBUs, it is expected that they will have more freedom to move to solve problems and also develop businesses in their areas," he said.

The establishment of SBUs is expected to solve power supply problems in a number of areas. Kuntoro noted that currently there were 21 critical areas in the country that faced electricity supply problems, that forced PLN to conduct alternate blackouts.

Commenting on demands by a number of local administrations that wanted to get a share at local PLN units or to impose more taxes to PLN, Kuntoro said his party was open for participation from local administration.

As for more taxes, PLN warned that it would affect electricity supplies in their areas. "But after getting explanation from heads of our local business units, a number of local administrations are even worried about the continuity of electricity supplies in their areas."

"As for the wish of local administrations to develop and manage their own electricity, we welcome that because it shows that local administrations care about the supply of electricity in their areas." (*)