PLN quietly raises power installation fees by 300%

State power utility PT Perusahaan Listrik Negara (PLN) has quietly raised tariffs for installing electricity at homes by as much as 300 percent for customers in Java and Bali without telling the Energy Ministry, The Jakarta Post reported on Tuesday.

New tariffs have also gone into effect for existing customers seeking to add power capacity in their homes, Purnomo Willy, PLN?s general manager for Jakarta and Tangerang distribution, was quoted as saying. The hikes came into effect on May 15.

Purnomo confirmed that low-income customers using the basic 450 volt-amperes of capacity were being charged as much as Rp 550,000 to Rp 600,000 (1US$ = Rp 10,000) to be connected, up from Rp 150,000 previously, although increases are being instituted across the income spectrum.

?The tariff increase is aimed at building the electricity transmission network for the power plants,? Purnomo said. ?We are not seeking to make a profit. We only want to cover the installation costs.?

Indonesia has some of the cheapest power rates in the world. PLN says the government requires it to sell power at less than the cost of production.

Purnomo acknowledged that the company has not given the new tariffs much publicity. ?We inform [customers] directly at our offices when they register to install new power.?

According to a 2001 ministerial decree, tariff hikes for new customers and adding capacity must be approved by the Energy Ministry. But according to Jacobus Purwono, the director general of electricity and energy usage at the ministry, PLN didn?t ask permission to raise rates.

In the past, PLN has had difficulty convincing the ministry to allow it to increase rates, raising questions as to whether the ministry will force the utility to rescind the tariff hikes.

?PLN had to comply with the government rule in this case. The tariffs should have complied with the ministerial decree,? Jacobus said. ?We would review the [tariff hikes] before making any decision.? (*)