PLN gets proposals to supply power to smelters

State utility PT Perusahaan Listrik Negara (PLN) has received 16 proposals, asking for electricity supply from 40 megawatts (MW) to 200 MW, from companies planning to build mineral smelter plants in Indonesia, a PLN official said as quoted by indonesiafinancetoday.com

PLN Commercial Division Head Beny Marbun said his company would provide electricity premium service, at prices higher than the industrial tariff, to the smelters. The premium service will, among others, guarantee that the customers will experience no power outage. In case they experience outage, then PLN will be slapped with a penalty.

Under the premium service scheme, PLN will charge the smelter customers between 9 US cents and 25 US cents per kilowatt hour (KWH), depending on their locations. If their locations are far away from the nearest power grid and PLN has to build a new power plant, then PLN would have to charge them the highest, at 25 US cents per KWH. If their locations are very near to its power grid, PLN will only charge the lowest at US 9 cents per KWH.

Among the proposals that had been approved by PLN is the one from PT Bosowa Metal Industries, a subsidiary of Bosowa Group. PLN and Bosowa have signed a memorandum of understanding (MOU). Based on the MOU, PLN will supply 70 megawatts of electricity to Bosowa?s smelter plant in Jeneponto, South Sulawesi. The smelter is planned to start operation in 2014.

The power proposals had been presented to PLN after the government issued Law No. 4/2009 on mineral and coal mining, which requires all mining companies to further process their mineral products before being exported. (*)