House questions plan to raise power tariff

The House of Representatives questioned on Tuesday the government’s proposal to raise the base electricity tariff by 15 percent, saying PLN’s efficiency should be audited first.

“It’s not fair if the public and the state budget must be burdened due to inefficiency within PLN. Therefore, we will ask the BPK [state audit agency] to carry out an audit of PLN’s performance,” Chairman of the House’s budget committee Harry Azhar Azis said Tuesday.

Harry added the audit results would be taken into consideration by the House in responding to the government’s proposal.

Finance Minister Sri Mulyani Indrawati announced Monday that the government might increase the electricity tariff fairly soon.

“There is a possibility that the electricity tariff will be increased by 15 percent starting from July 2010,” Mulyani said as quoted by Antara newswire.

The government said it would not raise the tariff in the first half of the year in a bid to maintain current economic growth. “For various reasons, we will not raise the tariff in the first half of the year as we are focusing on improving electricity services so that blackouts will no longer occur,” Coordinating Economic Minister Hatta Rajasa said.

The Energy and Mineral Resources Ministry’s director general for electricity and energy use J. Purwono said the 15 percent figure mentioned by the finance minister was the average figure. “The increase will vary depending on the customer category,” Purwono said, adding that this matter would be discussed further with the House.

“Whether the tariff will be increased or not, and how much the increase will be, are subject to the House’s approval,” Purwono said.

Harry said the House budget committee was looking forward to hear more detail explanations about the proposal. “We need to know further about which customers will be affected by the policy,” Harry said.

Harry added that he personally wanted the policy would not affect the lower middle class in the society. “Higher spending on electricity may make them reduce their spending on health and education,” he said.

“I have no problems with reducing the spending on the electricity subsidy , because the amount saved can be used to build economic infrastructure,” he quickly added.

Lawmaker Satya Widya Yudha from the House Commission VII overseeing energy and mineral resources said the commission would evaluate whether it is the right time to increase the electricity tariff. “We will study the way the 15 percent figure is determined considering that our economic growth is only 5.5 percent. We will also see whether this is the right time for the tariff increase,” he said.

PLN’s president director Dahlan Iskan refused to comment on the government’s proposal. “The tariff increase is in the government’s domain,” he said.