Indonesia’s state-owned power utility PLN is to raise electricity tariffs from September for firms using more than 14 kVA and government offices and businesses with capacities of more than 200 kVA during peak hours, charging up to double that of power off-peak.

The decision comes despite protests from the business sector on the basis of an increase in fuel costs for PLN.

PLN also plans to impose penalties for over-quota power usage, defined as half of each company’s average usage, also starting from September. The penalty will twice the peak power rate. However, PLN also intends to reward companies that manage to shift more than 50% of their power usage in peak hours to off-peak hours with a discounted tariff.

According to PLN, peak-hour demand surged after the government hiked fuel prices in March, suggesting that many companies switched to using power generated by the state firm instead of producing their own electricity.