PLN mulls to offer tariff hedging to export-oriented companies

State electricity company PT Perusahaan Listrik Negara (PLN) is mulling to offer a new system called hedging of power charges to export-oriented companies so that the difference in exchange rate, which is above power rate, can be reduced, the Bisnis Indonesia newspaper reported in its Tuesday edition.

PLN president director Eddie Widiono said his company has already offered the option to several export-oriented companies. However, he did not mention neither names of the companies nor which industry they belong to.

?We have already talked to several companies regarding hedging of tariffs concept, but it was only in the form of suggestion. If they want to choose particular option, they are most welcome, Eddie told the Bisnis over the weekend in Jakarta.

According to Eddie, PLN will offer the tariffs in rupiah and the U.S. dollar. S the companies can choose either or rupiah or dollar tariffs.

For example, if a company opts for rupiah, electricity charges will be increased slightly from the present charges and in case of dollar, the rates will lowered slightly.

The rupiah?s recent fall against dollar has inflicted heavy losses on the PLN. Because, the PLN adopted the exchange rate of Rp 8,600 per U.S. dollar in its budget, whereas the currently rupiah is trading above Rp 9,000 level.

?Since the rupiah is around Rp 9,000 level, the PLN is in dilemma. It is not possible to increase the electricity charges. So, therefore the only way is hedging of tariffs,? Eddie said. (*)