GOVT TO LIFT SUBSIDY FOR 900 VA ELECTRICITY CUSTOMERS

By Andi Abdussalam

Jakarta, Nov 24 (Antara) - Indonesia's Energy and Mineral Resources Ministry (ESDM) will effect a 32 percent electricity tariff increase every two months from January to May 2017 for 900 Volt Ampere (VA) power customers.        The increased electricity tariff will take effect after the government scrapped the subsidy for better-off customers of 900 VA power in three phases by raising the tariff  from Rp585/kWh to Rp747/kWh next January,   to Rp1,032/kWh next March and to Rp1,352/kWh next May.        Thus, with effect from May 2017, there will be no longer subsidy for economically capable 900 VA electricity customers while the remaining 4.1 million poor household customers will still enjoy one.      So far, the government has subsidized the electricity consumption of 23 million 900VA power costomers. Of the number, 18.9 million customers will no longer receive subsidy while the remaining 4.1 million poor household customers will still enjoy one.         The decision to abolish the subsidy for 900 VA household customers was reached in a working meeting between the Minister of Energy and Mineral Resources and Commission VII on energy affairs of the House of Representatives (DPR) on September 22, 2016.        Head of the Communication and Knowledge Management Unit of the National Poverty Elimination Acceleration Team (TNP2K) Ruddy Gobel had said last week (Nov 18) that the subsidy was actually being enjoyed predominantly by a relatively rich group of people.         So far, the government had been providing subsidy for 450 VA and 900 VA electricity customers. According to Gobel, the number of 450 VA power customers reached 22.8 million while 900 VA customers numbered 22.3 million. Thus, the total number of electricity subsidies' recipients was 45.1 million.         Most of these 45.1 million electricity customers were either relatively rich or economically capable customers. Only about 4.1 million of the total customers actually deserve the subsidy.          Each of the 900 VA household customers with an average power consumption of 124 kWh per month received a subsidy of Rp101 thousand per month. Each of the 450 VA poor household customers with a power consumption of 67.56 kWh per month received Rp66 thousand per month worth of subsidy.         According to Gobel, this situation had to be rectified. So the government, through the Electricity Directorate General, conducted an exercise to popularize the government plan to carry out electricity tariff adjustments and lift subsidies for economically capable customers, beginning July 2017.         Director General of Electricity Jarman said in July 2017, the government will impose newly adjusted electricity tariff. The 900 VA customers found capable of paying their electricity bills based on the economic tariff standards will no longer receive subsidy.        He stated that in order to alleviate customers' economic burden, the adjustments to the tariffs for 900 VA customers will be made in three phases, beginning January 1, March 1 and May 1, 2017.       Jarman noted that largest portion of the electricity subsidy in 2015 was enjoyed by the 450 VA and 900 VA customers. The subsidies reached Rp49.32 trillion. Based on data, of the 23 million 900 VA customers, only 4.1 million deserved the subsidy.       The government has allocated electricity subsidy amounting to Rp44.98 trillion for 2017, much below the Rp65.15 trillion allocation in 2016.         The director general said his office has been carrying out a popularization campaign on the government's electricity subsidy policy, targeting it to the rightful recipients.         "The implementation of on-target electricity subsidy would help pragmatic use of the state budget. Therefore, the allocation of subsidy for 2017 declined from Rp65.15 trillion in 2016 to Rp44.98 trillion in 2017."    The money saved through such subsidy cuts would provide fiscal room for the government to carry out its development programs in the health, education and infrastructure sectors.         "The budgetary funds thus saved could be diverted to developing the electricity infrastructure," explained Jarman.         After all, the electricity tariff adjustment could encourage customers to economize usage of electricity energy and thus lower the electricity peak burden. Anticipating complaints from the people about on-target electricity subsidy, a command post team has been formed to deal with these. It will be stationed at the directorate general for electricity.           The team comprised representatives from the ESDM ministry, the Social Affairs Ministry, the Home Affairs Ministry, the TNP2K and the state-owned electricity company PLN.         Last April, the government had launched a national movement for energy saving to cut power consumption in the country by 10 percent and save Rp43.2 trillion in three years.         Many people still consume energy in a wasteful fashion. Customers are expected to get accustomed to consuming energy efficiently at home, in offices and any other places.         The 10-percent Energy Saving National Movement was launched to encourage energy conservation to help save Rp43.2 trillion, an amount equal to the cost of constructing a 32,000-megawatt steam-powered electricity plant.          The movement is focused on 12 provinces, namely Jakarta, West Java, Banten, Lampung, East Java, Central Java, Yogyakarta, North Sumatra, South Sumatra, South Sulawesi, Bali and Riau.    ***3***(A014/INE)EDITED BY INE(T.A014/B/BESSR/A. Abdussalam) 25-11-2016 00:19: