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CalEnergy wins case against PLN

CalEnergy wins case against PLN

US developer CalEnergy has won its arbitration case against Indonesian utility PT Perusahaan Listrik Negara (PLN) and the Indonesian government over disputed power contracts. The ruling by a UN-supervised panel could pave the way for a number of similar cases by other power suppliers in Indonesia.

The arbitration panel ruled in early May that PLN must pay damages of $572.3m to CalEnergy, a unit of Mid-American Energy Holdings Company. CalEnergy said that the amount awarded will allow them to meet their debt obligations but does not allow for lost profit. Several other power producers in Indonesia may now take a similar path.

CalEnergy filed the arbitration case for breach of contract by PLN at two power plants – one in Dieng, central Java and the other at Patuha, West Java. CalEnergy has not paid for power supplies from the Dieng plant since it started operation in March 1998.

PLN is currently renegotiating ten of its 26 contracts with power producers. The utility has had difficulty meeting dollar payments for electricity supplies since the rupiah`s fall in value last year.

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