0 Hotel association rejects electricity rate hike

The Indonesian Hotels and Restaurants Association (PHRI) Bali chapter has expressed its objection to the central government’s plan to increase the price of electricity. In May this year, the government will gradually start imposing a new electricity tariff for customers under category I3 and I4. The I3 customers receive above 200 kilovolt ampere (kVA), while I4 receive in excess of 30,000 kVA. 

Adjustments will also be applied to some groups that are not subsidized, as they are considered able to afford the higher tariff. Those groups are large-scale households in the R3 category, with a capacity of 6,600 volt ampere (VA) and above, middle-scale businesses (B2 category) with a capacity of 6,600 VA to 200 kVA, large-scale businesses (B3) with 200 kVA and middle-scale government offices (P1) with a capacity of 6,600 VA to 200 kVA. 

The tariff applied for these groups will fluctuate, depending on indicators including the exchange rate, inflation and Indonesian Crude Prices (ICP), which are uncontrollable and affect the cost of electricity procurement. “We are still waiting for the central government’s decision and approval from the House of Representatives to start implementing this new policy,” said the general manager of PLN, the state electricity firm, Bali office, Ida Bagus Mardawa Padangrata. 

“The policy will likely take effect by May, but it takes time for implementation in the field, as we need to announce it to the public first,” he added. Commenting on this, PHRI chairman for Bali, Tjokorda Oka Arta Ardana Sukawati, expressed his objection to the policy, representing the hospitality business managements. “We’re OK with the new policy, as long as we are given enough time for the adjustment,” he said, 

stressing that the upcoming policy should be announced earlier before it was put into effect, unlike previously when hotel managements did not have enough time to incorporate the new electricity tariff into their room rates. “The accommodation industry is different from others. We can’t just abruptly change our room rates immediately after the operational cost increase. Our guests will not like it.” 

“Policies related to electricity tariffs for non-subsidized customers could change anytime, and it makes us confused,” he added. In the accommodation industry, the room rates are conveyed to the hotels’ business partners in the country and abroad for a certain period of time. Many hotels make their offers once or twice a year. The offered room rates fluctuate, depending on operational costs. 

Sukawati and some other hotel owners have often said they allocated 30 percent of operational costs to energy supply, to ensure the guests feel comfortable staying in their hotels, with ideal room temperatures and lighting, as well as other facilities that needed electricity. As soon as the electricity tariff increases, the prices for all hotel needs will escalate. 

“Electricity is vital for the accommodation industry. I hope this policy could be implemented in the next two or three years, not this year. It’s quite confusing for us if the electricity tariff could change at any time.” Mardawa expected that industries would accept the adjustment, since the policy was decided by the central government, not by PLN.

source : bali daily