Indonesia expects new power law approved in March

Indonesia expects parliament to approve a new electricity law in March which will end the distribution monopoly of state-owned PT Perusahaan Listrik Negara (PLN), a senior mines and energy official was quoted by Reuters as saying Tuesday.

Parliament is currently debating the law which will allow independent power generation companies to compete in selling energy directly to the public, a move experts say will encourage badly needed investment in the sector.

``We expect parliament to approve the new law in March. Our current law gives no room for competition,'' the official, who declined to be identified, told Reuters.

``When the law is passed then power companies can supply or retail electricity (directly) to customers,'' the official said.

Under current legislation, independent power companies have to sell electricity to PLN and the government utility then distributes it to the public.

Indonesia has said it would experience power shortages in 2003 and 2004 if extra capacity wasn't added.

Power demand in the sprawling archipelago is currently estimated to be growing by around 10 percent, one of the most robust markets in South East Asia.

The official said that once the new law was passed the government would set up a regulatory body to decide equitable allocation of profits and monitor fair competition.

He added the government would still give subsidies to poor people for electricity consumption, particularly in areas where competition was impossible. (*)