PLN will apply market mechanism in 2006

State electricity company PT Perusahaan Listrik Negara (PLN) will fix electricity charges based on a market mechanism starting from 2006 in order to attract investment, Bisnis Indonesia reported in its Tuesday edition.

This will be done precisely to provide better service to its consumers.

PLN’s president director Eddie Widiono said in Jakarta on Monday that the price based on the market is needed for the development of power sector, which would face market competition in the future.

“We hope market price will be applied in 2006 at the latest in order to strengthen the investment in power sector,” Eddie said after announcing 2004 will be a year of applying competence-based management in PLN.

PLN had previously applied the above system in Batam and later in Tarakan. The electricity charges in these areas are different from the other parts of the country.

It opened two independent companies namely PT PLN Batam and PT PLN Tarakan to manage the electricity distribution in their respective areas.

The government is currently making preparations to establish a regulating body (Bapetal) to supervise electricity sector. (*)