PLN Agrees To Include Coal Price To Set Electricity New Price


JAKARTA- State electricity firm PT PLN agrees to include coal reference price (HBA) as one of the components to set the electricity price along with the rupiah exchange rate against the US dollar, the Indonesian Crude Oil Price (ICP) and inflation.

Fabby Tumiwa, Executive Director of the Energy for Essential Services Reform (IESR) Institute, said the government’s plan to include the coal price increase component in the adjustment rate is not appropriate. The reason, the price of coal contracted with PLN does not change at any time and PLN does not buy coal from spot market and not import. But, long-term contracts with local producers.

In addition, the price of primary energy is a risk that must be managed by PLN, and the risk of coal with BBM is different. PLN should be able to manage coal price risk through contracts with mine producers / owners.

Read more about this article is available in Indonesia version.