Govt wants Paiton to sell power lower than 5 U.S. cents per Kwh

The government wants the state-owned electricity company PLN to negotiate for a lower power purchase price of below 5 U.S. cents per Kwh with independent power producer PT Paiton Energy Company.

?The government wants ? the power purchase price to be lower than 5 U.S. cents per Kwh,? Minister of Mineral Resources and Energy Purnomo Yusgiantoro said Thursday.

Purnomo called on PLN to continue negotiate with Paiton.

PLN said earlier that Paiton had agreed to lower its power selling price from 7 U.S. cents per Kwh to 5.4 U.S. cents per Kwh.

PLN president Eddie Widiono had also said that the 5.4 cents per Kwh price was already low enough.

PLN signed power purchase contract with some 27 independent power producers (IPPs) before the 1997 financial crisis hit the country. But following the crisis, PLN could not afford the relatively high power purchase price set by the IPPs, prompting PLN to renegotiate the contract.(*)