PLN to pay US$69m to Paiton Energy
PLN to pay US$69m to Paiton Energy
Dow Jones, Singapore
State power company PT PLN has signed an interim agreement to
make three fixed monthly payments totaling US$69 million in the
fourth quarter to independent power producer PT Paiton Energy.
A PLN official involved in the negotiation of the power
purchasing agreement said Thursday that PLN will pay Paiton US$21
million in October, $23 million in November and $25 million in
December for power generated from the 1,230-megawatt Paiton-I
plant.
Paiton Energy's shareholders are Edison Mission Energy, a unit
of Edison International, General Electric Capital Corporation, a
financing arm of General Electric Co., Japan's Mitsui & Co. and a
local partner, PT BHP.
Under the fixed payment deal, PLN is paying 3-4 cents a
kilowatt-hour for the electricity produced from Paiton-I, a rate
it hopes to secure in long-term power purchasing agreements, or
PPAs, with the operators of Paiton-I and Paiton-II projects in
East Java.
PT Jawa Power, operator of the 1,220 MW Paiton-II plant, is
seeking a minimum rate of 5 cents per kilowatt hour (kWh), but
the PLN official said the rate sought was "too high for PLN."
Jawa Power is 50 percent-owned by Germany's Siemens Power, 35
percent by the U.K.'s PowerGen PLC, and 15 percent by local
company PT Bumipertiwi Tatapradipta
PLN, the official added, is continuing negotiations for long-
term PPAs, which are expected to be concluded before the end of
the year.
Meanwhile, PLN's finance director warned that 24 critical
systems outside the Java-Bali grid in 2002 will experience power
shortages because of insufficient funds.
He said the state utility doesn't have the financial ability
to build new generating units to match the country's power demand
growth.
PLN expects to hook up 1.3 million new customers in 2002,
still 50 percent short of the 2.6 million new annual connections
achieved before the Asian crisis, Parno said.
PLN has about 29 million customers in the archipelagic country
with a population of 220 million, Parno Isworo said. Using the
statistics as a guide, PLN is servicing 60 percent of Indonesia,
leaving the rest with no access to electricity, he added.
"The demand pressure is great, but we cannot connect more
customers because we have no money," Parno Isworo said.
The power demand shortage is especially acute in 24 grid
systems identified. They include South Sumatra, West Timor, East
and West Nusa Tenggara and Potianak, West Kalimantan. The power
generation capacities in these areas are insufficient to meet
local demand because of a lack of fresh investment, he said.
PLN has no choice but to "curtail" the electricity supply in
these areas, said Parno Isworo. PLN will resort to power
rationing particularly during peak load periods.
There are few short-term solutions to resolve power shortfalls
in areas outside the densely populated Java-Bali grid. But in
South Sumatra, plans are underway to revive the construction of a
200-megawatt steam-powered power plant. However, there will be
frequent blackouts in the short term because the plant isn't
expected to be completed until 2005.