Govt issues new regulation to boost power plant development
Wednesday, April 30 2014 - 12:48 AM WIB
The government has issued a new regulation on power, which allows among others the development of power plant projects without tender process, in a bid to increase the national electrification ratio and to speed up the fulfillment of power needs in a more efficient way.
The Government Regulation No. 23/2014 on the Amendment to the Government Regulation No.14/2012 on Power Provision Business Activities was signed by President Susilo Bambang Yudhoyono on April 14, 2014.
The new regulation adds several chapters to the 14/2012 regulation. For instance, the 2012 regulation states that the business of supplying power for the public has to be carried out in accordance with the Electricity General Plan (RUK) and the Power Supply Business Plan (RUPTL).
Both regulations do not explain about the RUPTL, but the public understands the RUPTL is made by state owned electricity firm PT Perusahaan Listrik Negara (PLN).
The 14/2012 regulation does not provide explanations about the RUK. But, the 23/2014 regulations explains that the RUK consists of two, that is the National RUK and the Regional RUK. The National RUK is formulated based on the National Energy Policy with inputs from the regional governments. Furthermore, the House of Representatives should be consulted for the making of the National RUK.
Both the 14/2012 and 23/2014 regulations stipulate that purchasing of power and/or leasing of power network by power companies should be conducted in accordance with the Power Supply Business Plan (RUPTL) of PLN.
Power purchasing should be awarded through tenders, according to both regulations. However, the regulations say, there are instances where power purchasing can be carried out through ?direct selection? or ?direct appointment? mechanism or without or minimal tender process.
?Direct selection? means PLN must select from at least two bidders, while ?direct appointment? means PLN can directly appoint a power company to develop a project. Both regulations state that PLN can apply the ?direct selection? mechanism for the purchasing of power from power plants using non oil fuels.
The 23/2014 provides more details about the instances where PLN can carry out the ?direct appointment? mechanism. It states that the ?direct appointment? mechanism can be carried out for:
a. For the purchasing of power using renewable energy, marginal gas, mine-mouth coal and other local energies.
b. The purchasing of excess power supply
c. In case of critical conditions or emergency
d. The expansion of capacity of existing power plants.
Editing by Johannes Simbolon