Friday, 11 September 2009

Legislature unplugs PLN’s monopoly on electricity

The legislature has ended the monopoly of state-run PT Perusahaan Listrik Negara (PLN), paving the way for regional management of electricity rates. The new law stipulates that the electricity business, ranging from power generation to distribution, can be carried out by state enterprises, state regional companies, private companies and cooperatives and further stipulates that PLN and regional cooperatives are given first priority to provide electricity for public consumption. For areas that are not connected to a power provider, the central government or regional government will appoint or establish state regional companies, private companies and cooperatives to provide electricity for them. The new electricity law also provides room to adopt a new rates system that involves decision making at a regional government level. The law states that regional governments will determine power rates based on benchmarks from the central government and with the approval of regional legislative councils. Since the new law requires several implementation regulations, region-based rates will not be introduced until 2010 or 2011.
Source: The Jakarta Post, p.1 , September 09, 2009

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