REGULATION: Decree on purchases by PLN of gothermal power

THE MINISTER OF ENERGY AND MINERAL RESOURCES OF THE
REPUBLIC OF INDONESIA
REGULATION OF THE MINISTER OF ENERGY AND MINERAL RESOURCES NUMBER 2 YEAR 2011 REGARDING THE ASSIGNMENT OF PT PERUSAHAAN LISTRIK NEGARA (PERSERO) TO PURCHASE ELECTRICAL ENERGY FROM GEOTHERMAL POWER PLANTS AND THE BENCHMARK PRICE OF ELECTRICAL ENERGY PURCHASED BY PT PERUSAHAAN LISTRIK NEGARA (PERSERO) FROM GEOTHERMAL POWER PLANTS
BY GRACE OF GOD THE ALMIGHTY
THE MINISTER OF ENERGY AND MINERAL RESOURCES

Considering:
That in the framework of implementing the provisions of Article 19 and Article 20 paragraph (1) of Government Regulation Number 57 Year 2007 regarding Geothermal Business Activities as already amended by Government Regulation Number 70 Year 2010, Article 32 paragraph (4) of Government Regulation Number 10 Year 1989 regarding Provision and Utilization of Electrical Energy as already amended twice and the latest by Government Regulation Number 4 Year 2010 regarding the Assignment of PT Perusahaan Listrik Negara (Persero) to Expedite the Development of Power Plants Using Renewable Energy, Coal and Gas, it is necessary to stipulate a regulation of the Minister of Energy and Mineral Resources regarding the Assignment of PT Perusahaan Listrik Negara (Persero) to Purchase Electrical Energy from Geothermal Power Plants and the Benchmark Price of Electrical Energy Purchased by PT Perusahaan Listrik Negara (Persero) from Geothermal Power Plants;

In view of:
1. Law Number 19 Year 2003 regarding State-owned Enterprise (Statute Book of the Republic of Indonesia Year 2003 Number 70, Supplement to Statute Book of the Republic of Indonesia Number 4297);

2. Law Number 27 Year 2003 regarding Geothermal (Statute Book of the Republic of Indonesia Year 2003 Number 115, Supplement to Statute Book of the Republic of Indonesia Number 4327);

3. Law Number 30 Year 2007 regarding Energy (Statute Book of the Republic of Indonesia Year 2007 Number 96, Supplement to Statute Book of the Republic of Indonesia 4746);

4. Law Number 30 Year 2009 regarding Electricity (Statute Book of the Republic of Indonesia Year 2009 Number 133, Supplement to Statute Book of the Republic of Indonesia Number 5052);

5. Government Regulation Number 10 Year 1989 regarding Provision and Utilization of Electrical Energy ((Statute Book of the Republic of Indonesia Year 1989 Number 24, Supplement to Statute Book of the Republic of Indonesia Number 3394) as already amended twice and the latest by Government Regulation Number 26 Year 2006 ((Statute Book of the Republic of Indonesia Year 2006 Number 56, Supplement to Statute Book of the Republic of Indonesia Number 4628);

6. Government Regulation Number 45 Year 2005 regarding the Establishment, Management, Supervision and Dissolution of State-owned Enterprises ((Statute Book of the Republic of Indonesia Year 2005 Number 117, Supplement to Statute Book of the Republic of Indonesia Number 4556);

7. Government Regulation Number 57 Year 2007 regarding Geothermal Business Activities ((Statute Book of the Republic of Indonesia Year 2007 Number 132, Supplement to Statute Book of the Republic of Indonesia Number 4777) as already amended by Government Regulation Year 70 Year 2010 (Statute Book of the Republic of Indonesia Year 2010 Number 121, Supplement to Statute Book of the Republic of Indonesia Number 5163);

8. Presidential Regulation Number 4 Year 2010 dated January 8,2010 regarding the Assignment of PT Perusahaan Listrik Negara (Persero) to Expedite the Development of Power Plants Using Renewable Energy, Coal and Gas;

9. Presidential Decree Number 84/P Year 2009 dated October 21,2009;

10. Regulation of the Minister of Energy and Mineral Resources Number 15 Year 2010 regarding List of the Acceleration of Development of Power Plants Using Renewable Energy, Coal and Gas as well as Related Transmissions;

11. Regulation of the Minister of Energy and Mineral Resources Number 18 Year 2010 regarding the Organization and Working Mechanism of the Ministry of Energy and Mineral Resources;

DECIDES:
THE REGULATION OF THE MINISTER OF ENERGY AND MINERAL RESOURCES REGARDING THE ASSIGNMENT OF PT PERUSAHAAN LISTRIK NEGARA (PERSERO) TO PURCHASE ELECTRICAL ENERGY FROM GEOTHERMAL POWER PLANTS AND THE BECHMARK PRICE OF ELECTRICAL ENERGY PURCHASED BY PT PERUSAHAAN LISTRIK NEGARA (PERSERO) FROM GEOTHERMAL POWER PLANTS

Article 1
(1) In the framework of fulfilling the electricity need in its working areas and utilizing environmentally friendly energy, PT Perusahaan Listrik Negara (Persero) shall be assigned to purchase electrical energy from geothermal power plants.

(2) The electricity as referred to in paragraph (1) shall be purchased from geothermal power plants inside working area of geothermal mining, which results from:

a. Winners of tenders for working areas of geothermal mining; and

b. The existing holders of working areas of geothermal mining, which come from the granting of geothermal authorization or exploitation licenses on the basis of legislation before Law Number 27 Year 2003 regarding Geothermal is enacted.

Article 2
(1) In the framework of auctioning the working areas of geothermal mining as referred to in Article 1 paragraph (1) letter a, the benchmark price of electricity purchased by PT Perusahaan Listrik Negara (Persero) shall be set at USct9.70 per kWh at the maximum.

(2) The highest benchmark price as referred to in paragraph (1) shall be applied to the purchase of electrical energy in the high voltage side.

(3) In the framework of the assignment as referred to in Article 1 paragraph (1) and paragraph (2) letter a, PT Perusahaan Listrik Negara (Persero) shall be obliged to purchase electrical power resulting from geothermal power plants in accordance with the price of electrical energy resulting from the auction of working areas of geothermal mining.

(4) The purchasing price of the electrical energy as referred to in paragraph (3) shall be used in power purchase agreements, as well as shall be final and without negotiation.

(5) In a bid to expedite the electricity purchase agreement as referred to in paragraph (4), PT Perusahaan Listrik Negara (Persero) shall be obliged to prepare standard of power purchase agreement.

Article 3
(1) In the case of the result of auction of working area of geothermal mining being already executed before this ministerial regulation is stipulated, the price of electrical energy resulting from the auction of working area of geothermal mining shall remain effective and become the purchasing price of electricity by PT Perusahaan Listrik Negara (Persero), which is later written down into power purchase agreement, and in the case of the price of the auction result exceeding the benchmark price as referred to in Article 2 paragraph (1), the price shall be negotiated.

(2) Negotiation about the purchase of electrical energy from the geothermal power plants as referred to in paragraph (1) shall be based on the Self Assessment Price (HPS) of PT Perusahaan Listrik Negara (Persero) and shall be later written down into power purchase agreement.

Article 4
(1) In the framework of the assignment to purchase the electrical energy as referred to in Article 1 paragraph (1), the Minister of Energy and Mineral Resources shall issue a letter of assignment to purchase electrical energy to PT Perusahaan Listrik Negara (Persero) with a copy made available to the State Minister for State-owned Enterprises.

(2) The letter of assignment as referred to in paragraph (1) shall apply as:
a. Approval of direct appointment to purchase electrical energy from winners of tenders for working areas of geothermal mining by PT Perusahaan Listrik Negara (Persero); and
b. Approval of the purchasing price of electrical power from winners of tenders for working areas of geothermal mining by PT Perusahaan Listrik Negara (Persero) and become the purchasing price of electrical power by PT Perusahaan Listrik Negara (Persero), later written down into power purchase agreement.

Article 5
(1) The price of electricity purchased by PT Perusahaan Listrik Negara (Persero) from the holders of working areas of geothermal mining as referred to in Article 1 paragraph (2) letter b shall be implemented by referring to the highest benchmark price as referred to in Article 2 paragraph (1) and be subject to negotiation.

(2) Result of the negotiation as referred to in paragraph (1) shall secure approval from the Minister in accordance with the provision of legislation.

Article 6
(1) In the case of any failure in exploration and feasibility study in the framework of the assignment to purchase electrical energy as referred to in paragraph (1), the risk shall become responsibility of holders of authorizations, license to exploit geothermal or holders of geothermal business licenses.

(2) In the case of any failure against the risk of exploration and feasibility study as referred to in paragraph (1) in working areas of geothermal mining which cannot be managed by holders of geothermal mining authorizations, the risk shall become responsibility of geothermal developers.

(3) In the case of holders of authorizations, holders of licenses to exploit geothermal or holders of geothermal business licenses failing to implement the activities as referred to in paragraph (1) thus causing the licenses to exploit geothermal and geothermal business licenses to be revoked by the Minister, governor or regent/mayor by virtue of their authority, the agreement on the purchase of electrical energy from geothermal power plant shall be automatically expiring.

(4) In the case of geothermal developers failing to implement the activities as referred to in paragraph (2) thus causing contract to be terminated, the agreement on the purchase of electrical energy from the geothermal power plants shall be automatically expiring.

Article 7
The assignment shall be deemed already granted to the purchase of electrical power from the ongoing geothermal power plants before this ministerial regulation is stipulated and the purchasing price of the electrical energy shall secure approval from the Minister.

Article 8
Following the enforcement of this ministerial regulation, Regulation of the Minister of Energy and Mineral Resources Number 32 Year 2009 regarding the Benchmark Price of Electrical Energy Purchased by PT Perusahaan Listrik Negara (Persero) from Geothermal Power Plants shall be revoked and declared null and void.

Article 9
This regulation shall come into force as from the date of stipulation.
For public cognizance, the regulation shall be promulgated by placing it in State Gazette of the Republic of Indonesia.

Stipulated in Jakarta
On February 16,2011

THE MINISTER OF ENERGY AND MINERAL RESOURCES
Sgd
DARWIN ZAHEDY SALEH

Promulgated in Jakarta
On

THE MINISTER OF LAW AND HUMAN RIGHTS
Sgd
PATRIALIS AKBAR
STATE GAZETTE OF THE REPUBLIC OF
INDONESIA YEAR 2011 NUMBER 73