Monday, 31 August 2009

New bill allows local governments to issue power licenses

The new electricity bill will give full authority to regional administrations whose regions are outside state power company PT PLN's current service areas to issue licenses to local companies to provide electricity, The Jakarta Post reported. "The regional administrations may appoint regional government-owned companies or cooperatives to provide electricity for their areas," J Purwono, Director General for Electricity and Energy Utilization at the Energy and Mineral Resources Ministry, said on Monday.
He added that this policy would help the country to expand electricity supply to more areas. Currently only 65% of the country has electricity cover. "Some areas in Sulawesi, Kalimantan, and Papua are still isolated from electricity grids and access to power. (With this bill) regional government in these regions can establish companies to generate and sell power in these areas," he said. Purwono added that Local government may also provide subsidies if they want to have lower electricity tariffs in their areas. The electricity bill is being deliberated by the government and the House of Representatives in a process expected to be concluded by September. Currently, electricity in all regions is supposed to be provided and distributed by PLN with central government regulating tariffs and subsidies.
Source: Coordinating Ministry for Economic Affairs, Trade & Investment News, 20 Aug. 09

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