House blasts govt over power policy<\/p>\n
JAKARTA (JP): The House of Representatives noted that the
\ngovernment's decision to open up only the base category of power
\ngeneration to private investors is unfair.<\/p>\n
\"Why don't we offer also the medium and top categories to
\nprivate investment?\" Iskandar Mandji, a House member, contended
\nduring a hearing between the state-owned power companies and the
\nHouse Commission on Industry, Mining, Manpower and Investment.<\/p>\n
Currently, only power generators PT Pembangkitan Listrik Jawa
\nBali I (PJB I) and PT Pembangkitan Listrik Jawa Bali II (PJB II),
\nsubsidiaries of the State Electricity Company (PLN), operate
\npower plants of the three categories.<\/p>\n
Power plants of the base category are considered the most
\nprofitable ones because they can utilize their production
\ncapacity up to 100 percent. The plants in this category should
\noperate continuously.<\/p>\n
Unlike the base category, power plants of the medium category
\ncan produce at 50 percent of their capacity, while the plants of
\nthe top category operate for only a few hours a day.<\/p>\n
By the year 1998, however, several independent power producers
\nwill start their operations.<\/p>\n
\"When the private generators begin their operations,
\nelectricity production of the base category will be supplied by
\nPJB I and II and private producers,\" PJB II's president, Ady
\nSatriya, said.<\/p>\n
Satriya said that under the current system known as the
\nGeneral Guideline of National Electricity, private players are
\nallowed to invest in the base category.<\/p>\n
\"I don't know exactly the rationale of the government's
\ndecision to open only the base category to private players. Maybe
\nit was because the base category provides business certainty,\" he
\nadded.<\/p>\n
Participation<\/p>\n
Satriya, however, argued that the participation of private
\ncompanies in the base category is fair enough, as long as the
\nmarket share in that category is allocated proportionally to PJB
\nI, PJB II and private companies.<\/p>\n
PJB I's president, Firdaus Akmal, said that PJB I and II
\ncurrently produce 5,600 megawatts of the base category.<\/p>\n
He said that the government has estimated a 15 percent annual
\ngrowth of electricity demand in the next five years. PJB I and
\nPJB II will take one third of the growth, while private producers
\nwill take the remaining two thirds.<\/p>\n
\"The problem is how to allocate the supply if the growth is
\nbelow the prediction. In this regard, we have yet to get clear
\nguidance from PLN,\" Satriya said.<\/p>\n
PLN is the country's single buyer and distributor of
\nelectricity.<\/p>\n
The commission said that it can accept private investors'
\nparticipation in the generation of electricity, but such a move
\nis not fair if it fails to boost the performance of state-owned
\ncompanies.<\/p>\n
\"Why should we approve PLN's investment proposal if you (PJB I
\nand PJB II) can not increase your sales,\" Mandji contended.<\/p>\n
Firdaus revealed that PJB I has projected to sell up to 31.5
\nbillion kilowatt hours (kWh) next year or only 58 percent of its
\ntotal production capacity, which stood at 54 billion kWh.<\/p>\n
PJB I's production capacity is projected to increase to 58.3
\nbillion kWh by 2000, but sales are projected to grow only to 41.2
\nbillion kWh.<\/p>\n
Chairman of the commission Budi Hardjono said that the
\ncommission will bring the issue to another hearing with PT PLN as
\nthe holding company of PJB I and II, because the management of
\nthe two companies might not have the authority to answer the
\nHouse's questions.<\/p>\n
In line with the debut of private power producers, the House
\nmembers also called for a standardization of electricity selling
\nprices to PLN.<\/p>\n
The commission questioned whether PJB I and II, which
\ncurrently are being prepared to go public next year, will be able
\nto compete with private companies if PLN set up different prices.<\/p>\n
Satriya confirmed that like private companies, PJB I and II
\nare now looking for long-term contracts for power purchases with
\nPLN.<\/p>\n
\"One of the barriers to our planned initial public offering is
\nthe absence of a long-term contract with PLN,\" Firdaus
\nacknowledged.<\/p>\n
Firdaus said that PJB I and PJB II currently sell electricity
\nto PLN at Rp 82 (3.5 U.S. cents) per kWh and Rp 71 per kWh
\nrespectively.<\/p>\n
In contrast, Paiton Energy Co. was reported to have concluded
\na long-term contract to sell electricity to PLN at 8.56 U.S.
\ncents in the first six years of its operation.<\/p>\n
Consolidated Electric Power Asia in Indonesia, which will
\noperate the Tanjung Jati B power plant, set a selling price of
\n7.66 U.S. cents for the first six years. (alo)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/house-blasts-govt-over-power-policy-1447893297",
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