PLN, Sarulla consortium agree on power price

State-owned electricity firm PT Perusahaan Listrik Negara (PLN) said on Thursday that it had reached an agreement with the Sarulla consortium on the adjusted power sale price from the Sarulla geothermal power plant in North Tapanuli , North Sumatra, at 6.7 U.S. cents per kilowatt hour (kWh) from the previous 4.6 cents.

PLN President Director, Dahlan Iskan told reporters in Jakarta that the power purchase agreement (PPA) was signed early this month, under a 30-year contract. The project is expected to partly come onstream in 2013, he said.

Earlier, Director General of Electricity and Energy Utilization of the Energy and Mineral Resources Ministry Jacobus Purwono said the government will agree on the adjusted power sale price of the Sarulla geothermal power plant at around 6 U.S. cents per kilowatt hour (kWh).

He said in Feb 2010 that the adjusted price had been final but state electricity firm PT Perusahaan Listrik Negara (PLN) had yet to formally inform the agreement on the new price due to the absence of a legal umbrella which the company could use to set the price.

IDX-listed energy firm PT Medco Energi Internasional leads the consortium in the project which includes Japan ?s Itochu Corp (25 percent), Kyushu Electric Power Co Inc (25 percent) and American firm Ormat Technologies Inc. (12.75 percent).

The consortium plans to develop 3x110MW power plant in Sarulla. Initially, the consortium and PLN agreed to set the price 4.6 cents per Kwh, but the consortium later asked for renegotiation, asking electricity price to be raised to 7 cents.

The Sarulla geothermal project will be constructed over the next five years in 3 phases of 110 to 120 MW each. The first power generating unit is expected to be operating within 30 months after the financial closing, while the remaining two units are scheduled to commence operation over a period of 18 months following the first unit. (bernard)