The business industry estimates electricity tariffs for the industries can soar by 42.07% following an average increase of 10% in electricity base tariffs.
They suspect State Electricity Company PLN has another scenario behind the hike, which may negatively impact the industry following the soaring cost of production.
Such a condition may lead the businesses, which previously accepted the tariff hike policy, to strongly reject the policy and demand the government cancel the hikes.
Chairperson of the Indonesia Textile Association (API) Ade Sudrajat Usman explained the other scenario was related to the application of the coefficient multiplying factor (k) of 1.4-2.0 during the peak burden time (WBP) of 18:00-22:00 western Indonesia time zone.
Moreover, PLN turns out to raise the tariff for 350-hour electricity from IDR439 per kwh to IDR680 per kwh for I2, I3, and I4 category subscribers. Previously, the government was committed to eliminating all additional tariffs.
However, the business industry calculated the cost of production instead soared on the policy.
"We have made accurate calculation. Under the scenario by PLN that we have just recently found out, the average increase is not 6%-12% as showed on their website, but a whopping 30%-42% instead," he told Bisnis yesterday.
Assuming a coefficient of 1.4 during the WBP for the I3 category subscribers (installed capacity of 6,600 kVA), an increase of 10% in electricity base tariffs, and the elimination of maximum power tariff, the total electricity bill will surge by 29.78%.
"It means the average tariff will be IDR744 per kwh versus only IDR573 per kwh when the maximum power plus was applied."
Bill to Surge
Ade added under the same scenario with a coefficient of 2.0 during the WBP, the total bill would surge by 42.07%. "The average tariff can reach IDR814 per kwh," he said.
On the other hand, if the government was consistent with its promise of raising electricity tariffs by 10%, the total bill should only increase by 1.03% per month from IDR573 per kwh to IDR579.
He viewed the new scenario by PLN was not a fair policy since it could injure the manufacturing industry amid the global competition, demand for job creation, and the need for stronger foreign exchange revenues from export.
"Unfortunately, the government instead launches a counterproductive policy that makes us feel deceived. Before the tariffs are approved by the President, the API will reject the scenario and ask the government to review the tariff hikes."
Chairperson of the Indonesian Employers Association (Apindo) Sofjan Wanandi disclosed the Apindo would invite all of the stakeholders from the business industry and PLN to clarify things.
"I have known this [the new scenario by PLN] from several industry associations, but the news are still not yet clear. Therefore, the Apindo will invite the stakeholders to discuss the matter on Wednesday morning [July 7]. If PLN really wants the scenario, we will strongly reject it."
Response from PLN
In response to the complaints from the industry, Business and Risk Management Director of PLN Murtaqi Syamsuddin explained in principle the tariff policy aimed to reduce electricity comsumption during the peak burden.
However, he added, the coefficient multiplying factor still hovered around 1.4 and 2.0 in accordance with Minister of Energy and Mineral Resources of Regulation 7/2010 on Tariffs of Electricity Provided by PLN.
"Since electricity consumption during the peak burden is high, we give pricing signal with the coefficient. The old tariffs also applied the coefficient policy. However, the coefficient under the new tariffs has not yet been decided since PLN is still exercising every possible case. We will communicate it directly to the industries."
In accordance with the regulation, added Murtaqi, PLN would apply the coefficient based on the conditions and electricity reserves of power plants in each power grid. (Bisnis/yuw/nti)
http://www.bisnis.com/pls/bisnis/bisnis.cetak?inw_id=741855
A New Cornerstone of Legal Services in Indonesia
Periodical Review of Indonesian Politics, Economy and Other Public Issues
LGS Newsletter on Various Legal and Business Issues
Government Officials and Prominent Business Actors in Indonesia
Important Addresses You Should Know
