Local Electric
Thursday, 21 December, 2006 | 15:28 WIB

Tempo Interactive, Jakarta: J. Purwono, Director General of Electricity and Energy Use at the Energy and Mineral Resources Department, has said that local electricity rates must be applied to all regions under one electricity system.

If they were to be applied haphazardly, this could cause social envy.

Purwono cited Bogor, which experiences difficulties in applying its own local electricity rates because the area is included in the Java-Madura-Bali electrical system.

“Bogor residents are jealous. Why are rates in other areas lower, using national rate?” he said in Jakarta, yesterday (20/12).

Local electricity rates can be applied in Batam (Riau Islands) and Tarakan (East Kalimantan) because the two areas are under a separate electrical system.

According to Purwono, the application of different electricity rates in every region needs a thorough analysis, to include the public's preparedness, regional governments and electrical systems.

Fabby Turniwa, Coordinator of the Working Group for Power Sector Restructuring, is of the opinion that local rate applications must take into consideration the rate philosophy aspect.

So far there is a cross-subsidy between consumers in Java and outside Java.

Electricity generating production costs in Java is cheaper compared to outside Java, where the majority of power plants are oil-fueled.

There must also a maximum limit for local rates so that PLN (the State Electricity Company) does not apply rates that are too high.

“So far local rates are applied to regions where the people can afford them and primary energy reserves are sufficient,” said Fabby.

The Energy and Mineral Resources Department is analyzing local rate applications.

Two days ago, Energy and Mineral Resources Minister Purnomo Yusgiantoro said that regional rate applications must not be aimed at covering PLN losses, although, he acknowledged that applying this system would result in reducing PLN's loss burden.

Muhamad Fasabeni
Jawawa.net: Indonesian Business and Investment News Aggregator