New Energy Pricing May Go Through Government Assignment

Summary

The government and the House of Representatives started talks on New Energy and Renewable Energy Bill (EBET Bill). One of the main issues is the new energy price. The EBET Bill's Problem Inventory List (DIM) submitted by the government to the House of Representatives states that the new energy prices determination is based on the parties' agreement by considering the economic value and a reasonable rate for return for business entities.

However, if talks on determining the new energy purchase prices cannot reach an agreement, the government proposes that the selling price should be based on the central government's assignment. Thus, the government removed the provision for pricing through negotiations between the parties. It added that the selling price is determined through the economical price specific to the location and capacity to be developed in accordance with applicable procurement procedures.

Executive Director of the Institute for Essential Service Reform (IESR) Fabby Tumiwa said the new energy prices through central government assignments could unbalance the level playing field between the new and renewable energy sectors. "This must be addressed with caution. Do not let it be used for, for example, nuclear power plant opportunities that cannot compete in price. With the article, the government then sets higher electricity prices, and the public provides greater subsidies," Fabby said on Tuesday.

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