Jakarta, Feb 17 (Antara) - The government is formulating a new electricity tariff scheme by including the coal reference price (HBA) as one of the elements in the calculation of the basic electricity rate.
The inclusion of the HBA in the new electricity tariff scheme is based on the consideration that some 60 percent of the nation's electricity will still be supplied by coal-fired power plants until 2026.
In its automatic three-monthly electricity tariff adjustment, the government has included three elements of Indonesian Crude Price (ICP), rupiah exchange rate, and inflation in its electricity tariff formula. With the new scheme, the government will reformulate the elements by including the HBA.
However, the inclusion of the HBA elements in the basic electricity tariff structure is considered to be risky and disadvantageous for the state-owned electricity firm PLN.
According to Indonesian Consumers Foundation (YLKI) Chairman Tulus Abadi, the discourse on the reformulation of the electricity tariff by including the price of coal as one of the reference elements is basically very risky if it still refers to the international price.
Moreover, PLN's Workers Union (SP PLN) Chairman Jumadis Abda also reminded that the state power utility firm could be disadvantaged if the HBA is included in the formulation of the new tariff scheme.
During a press conference at PLN's Headquarters on Wednesday (Feb 7), he remarked that the coal price component, which is currently experiencing a price surge, is feared to drive up the electricity tariff and increase the burden on the people.
"It is not only the people who will lose, but PLN will also lose, as now the number of power plants has become surplus," he pointed out. As electricity price is on the rise, electricity absorption in the community is expected to decrease. Hence, PLN will be burdened with its obligation to pay to the large number of power plants.
"The use of power by consumers will decrease, thereby increasing the burden on PLN. When the electricity tariff is increased, the consumers will be disadvantaged while PLN will suffer a loss," he stated.
Abda called on the government to control the upward movement of coal price that disrupts the company's financial performance.
"We demand the government as well as the president and his staff in the Ministry of Energy and Mineral Resources to control and reduce the price of coal for domestic consumption, especially for power plants that have an impact on electricity tariff increase," he noted.
SP PLN is concerned that incorporating the coal price component in the tariff adjustment formula will cause a loss to electricity consumers. The inclusion of HBA in the tariff calculation will only increase the basic production cost (BPP) of electricity.
"We ask for the lowering of tariffs. BPP could come down by reducing its primary energy costs, namely coal and natural gas," he emphasized.
SP PLN called for the primary energy price control, especially of the coal needed for firing plants to produce electricity by the state-owned electricity company. According to Abda, if the primary energy can be managed properly, PLN will be able to save up to Rp40 trillion. The exclusion of other efficiencies, such as the Belawan project, undermines PLN's finances.
"Electricity tariffs do not need to rise if BPP is well managed'," he pointed out.
YLKI Chairman Abadi has hence urged the government to intervene to lower the coal prices in the interests of the electricity sector and the nation. The government should be able to set the upper and lower limits for the sales price of domestic coal, so that there is a clear benchmark.
"It is impossible that on the downstream side, the electricity tariff is highly regulated, while on the upstream side, it is very dynamic and liberal," he remarked.
The YLKI chairman suggested that the Indonesian government could take a cue from its South African counterpart that provides special prices for domestic sales and follows international prices for overseas sales.
Regarding the plan to include HBA in the new electricity price formula, Abadi said consumers need a reasonable price.
"Based on the consumers' point of view, a fair electricity price refers to the two aspects of the ability to pay and the willingness to pay," the YLKI chairman noted on Thursday (Feb 16).
Consumers deserve a reasonable electricity tariff as regulated under Law No. 30 of 2009, YLKI Chairman Abadi stated.
"Discourse on the reformulation of electricity tariff by including the price of coal as one of the reference elements is basically very risky if it still refers to the international price," Abadi pointed out.
According to Abadi, including the price of coal as an element in deciding the electricity tariff can still be understood if the government can control prices at the national level and not be based on international reference prices.
"Including the reference price of coal is very risky for both consumers and PLN as electricity providers, especially if the government is not able to control the domestic coal price," he explained.
Energy and Mineral Resources (ESDM) Minister Ignasius Jonan had earlier considered a new scheme for entering the coal reference price for formulating the electricity tariffs. This consideration is based on the extent of coal usage for generating power, which is still the key focus until 2026.
"We will try again to recalculate the electricity tariff formula, especially if the coal price is included, as 60 percent of our power plants primarily use coal energy. Hence, until 2026, coal will still be dominant, as the price is expected to remain more competitive, but power plants will also have to use technology that is more environmentally friendly," Jonan explained.
The use of diesel oil in power plants will be reduced to improve their cost efficiency.
"We earlier took into account the crude oil price (in the electricity tariff formula), as diesel oil was extensively used in power plants. However, now, the ratio might only reach four percent. By 2026, we have targeted to use only 0.05 percent of the ICP," Jonan explained.
However, the government has decided to not raise the electricity price for the period between Jan 1 and Mar 31.
"Electricity tariff for the period between Jan 1 and Mar 31 will be the same as the price in the last quarter (of 2017). There would be no price hike, and we will adjust the price every three months. The government has seriously taken into account the people's purchasing power," the minister remarked.
Yet, according to Electricity Director General of ESDM Andy Noorsaman Someng, the non-subsidized power rate can be raised based on the adjusted formulation.
Currently, the electricity power tariff is still calculated based on the three components: ICP, rupiah exchange rate against the US dollar, and inflation rate. Up to March, the average tariff for 450 volt-ampere (VA) household customers is Rp415 per kilowatt hour (kWh), financially weak 900 VA household customers at Rp586 per kWh, financially capable 900 VA household consumers at Rp1,352 per kWh, and non-subsidized power customers (tariff adjustment) at Rp1,467 per kWh.***3***(a014/INE)EDITED BY INE(T.A014/A/BESSR/A. Abdussalam) 17-02-2018 13:01 |
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