Electricity Sale Price - Batam

The Minister of Energy and Mineral Resources (ESDM) has issued Regulation No. 33 of 2008 to stipulate the price that electricity supplied by State Electricity Company (PLN) on Batam is to be sold for. The framework for the Regulation is that there is a need to ensure consistent supply to businesses operating in the free trade and port area of Batam where demand is expected to be high.

The Regulation stems from a PLN letter and a subsequent recommendation from the Batam City House of Representatives (DPRD Batam City) to standardize the price of electricity in accordance with the cost of supplying it. The increase in price will see a commensurate increase in the cost of doing business. However, the increase is supposed to be with consideration to the abilities of consumers to pay the higher prices.

The tariffs are contained in Attachments I and II and Attachment III provides the formula for calculating the price and explains all the symbols used in the calculations.

Not all businesses are happy with the Regulation or the price increases it will allow to be implemented. The business associations present on Batam have expressed their dismay at the rise, which in many instances reaches as much as 53% from the previous level. The associations are threatening to pay only a proportion of the next month’s electricity bills if PLN and the government do not reconsider the increases.

It is expected that the business associations will continue to lobby and seek a meeting with the Minister in order to see the Regulation amended to accommodate their concerns.

As it stands, the Regulation was enacted on 26 September 2008 and has been in force since 1 October 2008.