Indonesian utility questions power cap

State electricity company PT PLN has recommended the government revise the 2010 ministerial decree on basic electricity rates, if the cap on increases to power rates for industries is to remain in place.

PLN business and risk management director Murtaqi Syamsudin said Friday that as an executor of government policies his company needed a clear legal basis to avoid problems that appeared to be caused by the excesses of government policies.

"The government and House of Representatives may make political decisions, but for us the most important thing is that they materialize their decisions into clear legal instructions," he told reporters in a discussion in Jakarta.

The electricity rates for industries have recently been in legal limbo since PLN announced it would lift a cap on power rate increases in early January.

Through a ministerial regulation, the Energy and Mineral Resources Ministry introduced new power rates in mid-2010. Business owners slammed the change, as calculations showed they would experience increases in power costs of between 20 and 30 percent.

As a compromise, the government and House agreed to cap the tariff increases at 18 percent, as of July 2010.