Govt has the right to decide price of electricity from Unocal?s plant

The government has the right to decide the price of electricity that will be bought by state owned electricity company PLN from the Wayang Windu geothermal power plant in West Java if the level of the price resulted from the negotiation between PLN and the power plant developer Unocal is not realistic, Koran Tempo reported on Thursday.

"The government can annual the price if it is unfair," Director General of Electricity Luluk Sumiarso said, adding that PLN and Unocal had negotiated the selling price of the electricity from the Wayang Windu geothermal power plant for three years but no positive results had been made.

The pricing of the electricity supply from the geothermal has been reviewed after the Dutch-based institution CERUPT agreed to provide grant of about US$25 million to the pollution-free geothermal power plant.

The geothermal power plant which is being developed by Unocal?s subsidiary Magma Nusantara Limited will have a capacity of 2 x 100 MW. Under the Kyoto Protocol signed in 1997, pollution-free power plants such as the Wayang Windu power plant is qualified to receive the so called Clean Development Mechanism (CDM) grant. The grant is given as part of the international programs to reduce carbon emission in the world.

Unocal has said that with the provision of the grant, the price of the electricity from the geothermal power plant could be reduced by US$0.2 per kWh. (*)