Electricity Purchase Prices - Cooperatives and Other Business Entities

The Minister of Energy and Mineral Resources has issued Regulation No. 05 of 2009 to set out the guidelines for determining the price for electricity that the State Electricity Company (PLN) is to pay cooperatives and other business entities for electricity.

The Regulation recognizes that cooperatives and other smaller electricity providers pay an important role in the supply of electricity. However, the Regulation also recognizes that the price of electricity is also significantly influenced by prevailing macro-economic indicators.

The guidelines apply for all electricity purchases irrespective of whether the electricity being purchased is from new forms of energy, renewable energy resources, or non-renewable energy sources.

The purchase of electricity can be through public tender, direct appointment, or direct election however this must be done in an open, non-discriminative, transparent, and accountable manner.

Once PLN decides to purchase electricity from a cooperative or other business interest, then PLN must submit an application to the Minister including an estimated purchase price.

The Regulation has been in force since 24 March 2009.