PLN to close four oil-fired power plants

State electricity firm PT Perusahaan Listrik Negara (PLN) plans to shut down four large oil-fired power plants this year to reduce the company?s growing oil consumption, the company?s top executive said.

PLN president director Dahlan Iskan said Thursday that the four plants were the Tambak Lorok plant in Central Java, Muara Karang and Tanjung Priok plants in North Jakarta, and the Muara Tawar plant in Bekasi, West Java.

Dahlan said that the shut downs would not disrupt electricity supply on Java island, because the company would soon start operations of coal-fired power plants in Suralaya of Banten province and Paiton in East Java.

Besides Suralaya and Paiton, PLN also plans to begin operations of five other power plants this year. They are located in Lontar in Banten province, Pelabuhan Ratu and Indramayu in West Java, Rembang in Central Java, and Pacitan in East Java.

The plants are part of the Phase One 10,000-MW fast-track program.

Dahlan calculated that with soaring oil prices, the cost to subsidize oil-based fuel for PLN operations would surpass the government?s target of Rp 70 trillion (US$7.77 billion) in 2011, but he declined to give a definite answer on whether electricity rates would be increased.

?With the current high oil price, electricity rates may also increase. But it is the government and the House of Representatives that have the authority to decide on that,? he said.

The government set the cost of subsidizing oil-based fuel for PLN operations at Rp 70 trillion this year by projecting that the yearly average oil price would remain at $80 per barrel. (giok)