Bali Braces for Higher Electricity Rates

(6/20/2009)

Electricity rates for customers on the Indonesian islands of Java and Bali are likely to be higher than elsewhere in the Republic if current plans to introduce regional electrical tariffs are enacted by the government.

The Director General of Electricity and Energy Consumption (LPE), from the Department of Energy and Natural Resources (ESDM), Jacobus Purwono, told Bisnis Indonesia that he is in the process of reviewing a final draft of a new electricity regulation. Purwono said: "The plan will introduce a new regional tariff, based on regional tariff rate system. Java-Bali electrical rates will be higher when compared with other regions."

The new regional tariffs, according to Purwono, will be based on a formula that considers the quality of electrical service provided to each region in combination with the economic strength of the people living in each region. He also explained that electrical service in Java and Bali consumes 80% of the Sate Power Board's (PLN) attention and, as such, should cost more for consumers living in those areas.

Conversely, those regions of the nation suffering power deficits and experiencing frequent interruptions in electrical service will enjoy a lower, subsidized PLN tariff.

The ultimate goal of the new tariff scheme is to reduce the level of subsidies paid by the government to consumers by having well-supplied electrical customers help cover the cost of providing power to more disadvantaged regions.

The new regulations governing electricity supplies will also open the opportunities for private companies to produce electrical power and sell it to PLN.