PLN proposes to increase power rates in 2006

State-owned electricity company PT Perusahaan Listrik Negara (PLN) has proposed a plan to increase electricity tariffs through automatic tariff adjustment system starting from 2006.

The increase will be applicable to only the non-regulated group whoe are ineligible for subsidy.

?We used this formula during November 1994 to April 1998 with an average tariff increase of 7 percent,? PLN president director Eddie Widiono said on Monday during a hearing with the House of Representatives? Commission VII.

The formula will take four factors ? inflation, exchange rate change in fuel prices and change in electricity tariffs ? into consideration. This policy, according to Eddie will be implemented in order to maintain an economical tariffs to make profits.

He also said PLN will take into consideration the interests and ability of its customers and the basic norms of industries and healthy business practices while calculating the electricity prices. It will also observe production costs, scarcity of primary energy, company?s scale and the inter-connection system as well as available funds for investment. (dino)