Govt completes contract renegotiation with 19 IPPs<\/p>\n
A'an Suryana, The Jakarta Post, Jakarta<\/p>\n
The government has completed power purchase contract
\nrenegotiations with 19 independent power producers (IPPs),
\nprogress that will help ease the financial burden of state-owned
\nelectricity company PLN in meeting greater electricity demand in
\nthe future.<\/p>\n
PLN president Eddie Widiono said Wednesday that it was hoped
\nthat renegotiations with seven other IPPs would be completed by
\nthe middle of the year.<\/p>\n
"But one contract is still in limbo, namely the Karaha Bodas
\ngeothermal power plant, which remains in litigation," Eddie said
\nduring a hearing between the government and the House of
\nRepresentatives Commission VIII on mining and energy.<\/p>\n
The government team is led by Coordinating Minister for the
\nEconomy Dorodjatun Kuntjoro-Jakti.<\/p>\n
PLN signed power purchase contracts with 27 IPPs in the early
\n1990s during the rule of president Soeharto to avoid a power
\ncrisis in the future.<\/p>\n
Many said the power purchase prices were too expensive. The
\nfinancial and economic crisis which hit in 1997 further weakened
\nthe ability of PLN to meet the contracts, and sent the company to
\nthe brink of bankruptcy.<\/p>\n
The government then suspended the IPP contracts and moved to
\nrenegotiate them.<\/p>\n
Eddie said the renegotiated contracts covered power plants
\nthat could produce a combined capacity of 9,885 Mega Watts (MWs),
\nor around 91 percent of the total capacity produced by the 27
\nIPPs.<\/p>\n
The seven contracts currently being renegotiated by the
\ngovernment are the Tanjung Jati A power plant project, Tanjung
\nJati C, the Cilacap plant, Serang plant, Pasuruan plant, Cilegon
\nplant and Kamojang plant.<\/p>\n
Meanwhile, the Karaha Boda project is in limbo following years
\nof legal dispute between its contractor and the state-owned oil
\nand gas company Pertamina.<\/p>\n
Eddie did not disclose details of the renegotiated contracts,
\nincluding the final price PLN must pay for the power produced by
\nthe IPPs.<\/p>\n
But he said that for the Tanjung Jati B coal-fired power
\nplant, it had been agreed that the price would be 4 U.S. cents
\nper kWh over 20 years.<\/p>\n
But Eddie said that most of the contracts ended up with a
\nprice level of below 5 U.S. cents per kWh, compared to the
\nprevious price levels of more than 7 cents per kWh.<\/p>\n
This should benefit PLN as the company was selling its
\nelectricity at Rp 488 or 5.42 cents per kWh.<\/p>\n
In an earlier report, a PLN official claimed the contract
\nrenegotiations were able to cut PLN's losses by US$5 billion.<\/p>\n
PLN has been operating at a loss since the monetary crisis hit
\nin 1997. Last year PLN booked financial losses of around Rp 4.47
\ntrillion.<\/p>\n
List of renegotiated contracts<\/p>\n
1. Drajat power plant
\n 2. Paiton I
\n 3. Paiton II
\n 4. Sengkang
\n 5. Tanjung Jati B
\n 6. Pare-pare
\n 7. Salak
\n 8. Amurang
\n 9. Sibolga
\n 10. Palembang Timur
\n 11. Cikarang
\n 12. Asahan
\n 13. Sibayak
\n 14. Cibuni
\n 15. Wayang Windu
\n 16. Sarulla
\n 17. Dieng
\n 18. Patuha
\n 19. Bedugul<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-completes-contract-renegotiation-with-19-ipps-1447893297",
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