Sudjana sets rules for power price renegotiations<\/p>\n
JAKARTA (JP): Minister of Mines and Energy I.B. Sudjana
\nannounced yesterday rules for state-owned electricity company PLN
\nto follow during its price renegotiations with private power
\nproducers.<\/p>\n
Sudjana stated that the capacity factor -- or the volume of
\npower -- to be bought by PLN from private producers should not
\nexceed public demand.<\/p>\n
He further stipulated that the price of private power should
\nnot be higher than PLN's selling price to the public and that
\nprivate power producers should sell 10 to 20 percent of their
\nstocks to PLN subsidiaries.<\/p>\n
Finally, he said PLN's engineers should take part in the
\ndevelopment and operation of power projects.<\/p>\n
\"These four rules should be taken as principles to be followed
\nby PLN in its negotiations with private power producers so that
\nthe social mission of PLN can still be visible in private power
\nprojects,\" Sudjana said after opening a leadership seminar at the
\nVeteran Pembangunan Nasional University, in South Jakarta.<\/p>\n
Sudjana recently ordered PLN to renegotiate the prices for
\npower it bought from private power companies to avoid PLN from
\ngoing into bankruptcy following the sharp depreciation of the
\nrupiah against the dollar.<\/p>\n
PLN buys private power in dollars, but sells the power to the
\npublic in rupiah.<\/p>\n
PLN has signed power purchase agreements with 29 private power
\ncompanies, which are controlled by a small number of
\nconglomerates, foundations and politicians in consortia with
\nforeign power companies.<\/p>\n
Under the current contracts, private power prices range from
\n5.73 US cents to 8.4 cents. PLN sells the power for Rp 170 (4.3
\ncents).<\/p>\n
PLN predicted that it would suffer a Rp 1.5 trillion loss if
\nit had to buy private power at current contract prices.<\/p>\n
PLN's president Djiteng Marsudi recently told the House of
\nRepresentatives that the company would not only renegotiate its
\npower prices but also other contract terms, including the volume
\nof power it was obliged to buy and the involvement of PLN's
\nsubsidiaries in the projects.<\/p>\n
None of the 29 private companies contracted with PLN currently
\nfall in line with the outlines set out by Sudjana.<\/p>\n
PLN only has a stake in the Asahan hydropower project in North
\nSumatra through its subsidiary PT Pembangkitan Tenaga Listrik
\nJawa Bali II (PJB II).<\/p>\n
According to its current power purchase contracts, PLN has to
\nbuy 80 percent of the private companies' power producing
\ncapacity.<\/p>\n
Two of the private power plants that recently have been
\nconnected to the PLN power grid -- the 135-Megawatt (MW) Sengkang
\ncombined cycle power plant in South Sulawesi and the 165-MW Salak
\ngeothermal power plant in West Java -- are currently negotiating
\nwith PLN.<\/p>\n
Another power plant scheduled to be connected to PLN's grid
\nnext year is the Private Paiton I coal-fired power plant with a
\n1,230 MW capacity.<\/p>\n
Djiteng said at the House that PLN had offered to buy 30
\npercent of the two power plants' production capacity rather than
\n80 percent.<\/p>\n
The remaining 70 percent of the power produced at both power
\nplants would be pooled and bought by PLN at a tender price.<\/p>\n
PLN also offered to buy the power at 15 percent below PLN's
\nselling price.<\/p>\n
Sudjana said yesterday he still was allowing PLN to
\nrenegotiate independently, but warned that the government would
\nintervene if PLN did not make satisfactory headway.<\/p>\n
\"We (the government) will enter the renegotiations, if (PLN)
\nwas not able to do that,\" he said. (jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/sudjana-sets-rules-for-power-price-renegotiations-1447893297",
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