House wraps up debates, ready to approve power law
House wraps up debates, ready to approve power law
Johannes Simbolon, The Jakarta Post, Jakarta
After a debate lasting one-and-a-half years, legislators and
the government have eventually reached agreement on the final
draft of the electricity bill, which is scheduled to be endorsed
during a plenary session next week.
Agusman Effendi of the Golkar party, who is the head of the
House of Representatives' committee deliberating the electricity
bill, told The Jakarta Post on Friday that his committee and the
government's team had finalized their discussions on the bill on
Thursday and that the House was scheduled to hold a plenary
session next Wednesday to endorse the bill.
"All the major points of the bill have been agreed upon. We
now need only to synchronize the material in the bill in the days
ahead of the plenary session," Agusman said.
The government submitted the power bill to the House in early
2001, but the House did not start its deliberations for another
couple of months.
The initial version of the bill sparked protests from many
members of the public, including the workers of public power
utility PT PLN, given its goal of liberalizing the country's
power industry and stripping PLN off its decades-long monopoly
over the power sector. With the enactment of a new power law, the
government is seeking to lure investors into the country.
Critics fear that liberalization will result in a sharp
increase in power prices, thus hurting consumers.
They have demanded that the government keep the current system
unchanged, in which the power price is controlled by the
government and only PLN is authorized to sell power to the
public. Independent power producers can only sell power to PLN.
Agusman said he believed the final text of the bill would
satisfy both investors and the members of the public who
protested the initial version proposed by the government.
Under the final version of the bill, Agusman said, the
government would maintain the current PLN-monopoly system in
less-developed areas for years to come, while in developed areas
such as Java and Bali, liberalization would be implemented
gradually starting five years after the enactment of the law.
One year after the enactment of the law, the government would
set up a special authority tasked with supervising competition in
sector.
When an area was fully liberalized, Agusman said, any private
company would be allowed to generate power and sell their power
directly to the public. They would also be allowed to set up
their own distribution and transmission networks in cooperation
with the government or use the state-owned network now operated
by PLN to supply their power.
"The distribution and transmission network is considered a
natural monopoly and must be owned by the state. Any company is
free to use the network for a fee," Agusman said, adding that the
power grid now operated by PLN might be transferred by the
government to another state company during the competition era.
Agusman also said that in line with the spirit of
decentralization, regional governments would be allowed to issue
licenses for private companies to generate power in their
respective areas and build their own networks.
Energy expert Kurtubi, a strong critic of the bill, said he
was "surprised" upon learning that the House would approve the
bill, saying the government had pressed the House to quickly
approve it. The government, in turn, was under pressure from the
Asian Development Bank (ADB) to quickly get House approval for
the bill, he said, without elaborating on the ADB's reasons for
pressuring the government.
"Many countries in Europe and many states in the United States
have delayed liberalizing their power sectors for fear of a sharp
increase in power prices.
"Thus, why should Indonesia be in such a haste to liberalize
its power sector?" he said.