Govt sets reference prices of electricity sold by IPPs to PLN

The Ministry of Energy and Mineral Resources has set the maximum reference prices of electricity sold by independent power producers (IPPs) to state-owned electricity company PLN, Investor Daily reported on Friday.

The maximum reference prices are stated in the Energy and Mineral Resources Minister's decree No. 044/2006 on the maximum reference prices of electricity bought by PLN from IPPs appointed to build coal-fired power plants under the government's fast track program.

The decree stipulates that the maximum prices of power produced by coal-fired plants with a capacity of up to 25 MW is Rp 520 per kwh or 4.95 U.S. cent. For coal-fired power plants with a capacity of above 25 MW to 150 MW is Rp 495 or 4.75 U.S. cent per kwh, while those with a capacity of above 150 MW is Rp 485 or 4.50 U.S. cent.

Under the decree, if the pricing is based on the average selling prices set by PLN, the maximum price of electricity bought from coal-fired power plants with a capacity of up to 25 MW is 70 percent (of PLN's average selling price). For coal-fired power plants with a capacity of above 25 MW to 150 MW is 65 percent while those with a capacity of above 150 MW is 60 percent of PLN's average selling prices.

On the standard procedures for the appointment of investors to be engaged in developing a coal-fired power plant under the fast-track program, the decree stipulates that the company appointed to distribute power supply, through the Authority of Electricity Business (PKUK), should publicly invite the bidders through an announcement in a newspaper and its website.

PKUK should then provide a pre-qualification form a day after the announcement, and the bidders should return the form within five days. PKUK should announce those passed the pre-qualification selection five days after the return of the forms.

Those passed the pre-qualification selection should then sign a selling and purchasing agreement a day after the announcement. PKUK should open the tender for the qualified bidders within 30 days from the announcement of the pre-qualification winners before selecting the winner. The winner should be announced through a newspaper or its website. (*)