Power bill passed into law after long deliberation

The House of Representatives (DPR) on Wednesday passed into law the power bill which will gradually liberalize the power sector and boost investment.

All nine factions endorsed the bill, saying competition would force power producers to keep electricity prices at the level reachable to the public at large.

?Competition will eventually lower the price of electricity, and the public at large will benefit from the lower prices,? Tunggul Sirait from the National Awakening Faction (FPKB) said in the House plenary session.

Astrid Susanto from the Indonesian Nationhood Faction (FKKI) said the bill would provide legal certainty in the country?s power sector, and this would attract more foreign investments.

Golkar Faction?s Rustam Effendi said in the House meeting that the bill was not that liberal as many had claimed because it still allowed state electricity company PLN to hold monopoly, albeit only in less developed areas. The company had monopolized the country?s electricity sector for decades.

Other factions were worried about the possibility of power producers forming cartels in order to keep prices at the level favorable to them.

The bill, which had been deliberated at the DPR for one and a half years, stipulated the formation of an electricity regulatory commission which will set power prices prior to the introduction of free competition, and ensure fair prices under free competition.

The endorsed bill allows licensed power producers to sell their electricity to the public by themselves or through agents.

A state agency will be formed to fulfill the government?s role of controlling power transmission and distribution networks, the task so far carried out by the government.

Meanwhile, the bill allows local governments to issue licenses to private investors wishing to develop power plants and sell electricity to the public. (*)