Official - Electricity Tariff Increase July 2010

BASIC ELECTRICITY TARIFF WILL BE INCREASE BY 10% IN JULY 2010.

It is already in the news that Government of Indonesia will increase the basic electricity tariff by 105 in July 2010. By doing this, the government can reduce the subsidy up to IDR 800 billion per month and thus can reduce government spending and avoid budget deficit. I personally say this is a good news. I might have higher electricity bill next August, however this is a real momentum for energy efficiency measures. Government should and must make bigger campaign on energy efficiency and conservation. More news in Detik Finance (in bahasa).

PLN Says - Free Electricity for Poor People

Director of PLN mentioned this idea to provide free electricity for poor consumers. Poor consumers according to his definition are those who have 450 VA connections. According to his calculation, PLN will only lost IDR 1.5 trillion if electricity is free for poor consumers. His argues that if the new tariff is applied PLN will profit IDR 20 trillion from richer consumers. If tariff is applied and no exceptions are made PLN will profit roughly IDR 40 trillion. 

Opinions are divided into two groups. Those that are supporting the idea say that all other state owned companies should also do that as social obligation. Those who against the idea say that such thing will only create complex conditions, opening more holes for corruption, making PLN suffers from lost (despite calculation above) and many other reasons.

Fuel Subsidy - Quo Vadis?

Recently there is a big discussion on the internet about the plan from the government to reduce the consumption of subsidized fuel (especially gasoline). There are some proposals to reduce the consumptions: ban the motor bikes from buying subsidized gasoline; limit the purchase per motorized vehicle per man per day; smart card to limit the purchase; and ban the cars from consuming the subsidized fuel. There is a big discussion about the proposed strategies especially the one that plans to ban motor bikes from buying subsidized fuel.

the motorists are against that particular strategy and their opinion is backed up by motor cycle industry. Their arguments mainly are: motor bike consumption is far less that car, therefore it is the car that should be banned from using subsidized fuel; motor bike users are mainly of lower income therefore using non subsidized fuel would certainly eat bigger part of their income. Final decision is not yet taken since any decision will certainly effect the national economy.

ISO 50001 Energy Management

International community is moving forward on Energy Efficiency. Right now there is already a draft of ISO 50001 which standardize Energy Management. Energy management is an essential component of efforts to increase the efficiency of energy usage. It is an essential part because energy efficiency and conservation needs clear plan, strategies, and target to achieve. Energy, in a production process, is an important part that affects the cost of production therefore managing energy usage wisely and methodically will lead to reduced cost of production and eventually increase the competitiveness of the product and also the company.

Indonesia will certainly adopt the standard. The head of Standardization Agency (BSN) has informed public that they are on the track of adopting the ISO standard. As soon as the international draft is approved and becoming operation ISO, Indonesian government will immediately adopt it.

There are some options of adaptation. First is full adaptation and only translation is needed. The second is slight changes and most of the ISO standard is included. This strategy needs longer time to finish. The last one is creating new national standard with the ISO standard as the reference. This last strategy takes longest time. BSN is likely to choose the fast track strategy, or 100% adopt the ISO. To my opinion, this strategy is the most appropriate one. Indonesia now is badly in a need of Energy Management standard to improve national competitiveness and also energy performance.

Hopefully many companies will in the future voluntarily apply the new ISO or new National Standard to improve their performance and competitiveness. Now there is a big need for energy managers.