Paiton awaits PLN's response on its price proposal

Paiton Energy is still waiting for a formal response from the state owned electricity company PLN on the proposed price for the electricity to be produced from its second power plant, Bisnis Indonesia reported on Wednesday.

"We are still open for further negotiations, but before taking another talk we need a formal response from PLN to our proposal," Vice President Corporate Affairs, Ed McCartin said.

McCartin said that Paiton's proposed price of US$0.0457 per KWh had been considerably very low. "Such a low tariff could be offered due to the strong commitment of the investors in Indonesia, and the strength of the company's existing operations in the country," he said.

PLN's director for power generation and prime energy Ali Herman Ibrahim earlier said that the price proposed by Paiton Energy was still too high. "We want the price to be set at US$0.046. The decision has not been made, it is being evaluated," he said.

Paiton Energy, which currently operates a 1,230 MW steam power plant in East Java, plans to build a new power plant with a capacity of 800 MW. The company proposes PLN to buy the power from the second plant at US$0.457 per kilowatt-hours. At present PLN buys the electricity from the existing Paiton power at US$0.493. (*)