House set to pass electricity bill into law Sept 6

The House of Representatives (DPR) is expected to pass into law the electricity bill in its plenary session on September 6, a senior legislator said on Tuesday.

Irwan Prayitno, chairman of DPR?s commission VIII in charge of energy and mineral resources, said the commission had finalized deliberation of the bill which would end the decades long monopoly of state power company PT PLN. The commission started deliberating the government-initiated bill about one year ago.

Irwan said all House factions in Commission VIII had agreed that the bill be submitted to the House plenary session on September 6. He was optimistic all House factions would approve the bill in the meeting.

If passed, the new law will replace existing law, Law No. 15/1985, which is seen as discouraging private investments in the power sector. The bill stipulates involvement of provincial administrations in the formulation of power polices in accordance with the implementation of regional autonomy laws.

Further, the bill strips PLN of its decades long monopoly over the country?s power sector and makes it a limited liability company.

The bill stipulates that all power producers including PLN will sell power to the public through a bidding system. The cheapest power will be allowed to enter the power grid first, and all power grids will be operated by the so-called Power Market Agency which will be formed by the government.

Existing regulations obliges any power producer to sell its electricity to PLN which controls power distribution and transmission networks.

Moreover, the regulations can allow independent power producers to operate in Indonesia only if they have signed a purchase agreement with PLN. (godang)