Kuntoro imposes 'high' power price for Freeport
Kuntoro imposes 'high' power price for Freeport
JAKARTA (JP): Minister of Mines and Energy Kuntoro
Mangkusubroto has set a price of 9 U.S. cents per kilowatt hour
(kwh) for power generated by PT Puncakjaya Power for mining
company PT Freeport Indonesia.
Kuntoro set the price, higher than general industrial power
prices, in a letter dated April 29 addressed to Puncakjaya Power,
a copy of which was made available to The Jakarta Post yesterday.
"The price is only applied for the power supplied by PT
Puncakjaya Power to PT Freeport Indonesia Company," Kuntoro wrote
in the letter.
"If there is a change in the power price in the future, a new
decree will be made on the basis of the agreement between
Puncakjaya and Freeport."
The price level is higher than the power price set by the
Independent Power Producers (IPPs) for state electricity company
PLN, ranging between 5.74 cents and 8.4 cents per kwh.
PLN has claimed the power prices are too high, and it has made
moves to renegotiate with the IPPs on the prices.
PLN has been severely battered by the economic crisis because
it gets revenue in rupiah but a considerable amount of its costs,
including the purchase of power from IPPs, is in U.S. dollars.
A spokesman for Freeport expressed no qualms about the price
yesterday.
"The price was agreed upon by Freeport and Puncakjaya during
the negotiation. The minister only approved our agreement," the
company's manager of public affairs, Edward Pressman, told the
Post.
He said Puncakjaya was owned by a consortium led by Duke
Energy of the U.S.
The power company has supplied Freeport's base of Tembagapura,
Irian Jaya, with power from its 195 megawatt (MW) coal-fired
power plant at the port of Amamapare -- about 45 kilometers from
Tembagapura -- since 1994.
"It is a remote area. Puncakjaya should pay a high power
generation cost," Pressman said, adding that the company obtained
its coal from Kalimantan.
Freeport, an affiliate of the U.S. Freeport McMoran Copper and
Gold, is the country's largest mining company, producing gold and
copper. It has been operating in the country since the 1960s.
(jsk)