Indonesia’s Utility and Regulator Learns about Power Purchase Agreement in California, U.S.

3 September 2018

The United States Agency for International Development (USAID) through its Indonesia Clean Energy Development II project (ICED II) is organizing Utility Executive Exchange Program (UEEP) for State Electricity Company (PLN) to visit California Public Utility Commission (CPUC), California Independent System Operator (CAISO), and Sacramento Municipal Utility District (SMUD) from August 11 – 18, 2018. The exchange program is also supported by United States Energy Association (USEA).

Under this program, USAID has previously organized a visit to California for PLN, the Ministry of Energy and Mineral Resources (MEMR), and the National Development Planning Agency (Bappenas) in March 2017. In response to this visit, in December 2017 Director of Operation of CAISO visited Indonesia for intensive discussions with PLN corporate directors and followed with a visit by delegation from CAISO, SMUD, CPUC and Hawaii Electric Light Company (HELCO) to Indonesia in March 2018.

These exchange visits proved to be an effective way for MEMR and PLN as ICED II partners to learn and improve coordination within and between partner organizations. Indonesian delegates learned from professionals in the U.S. with the same responsibilities how to address current and expected challenges in integrating renewable energy into the Indonesian utility grid. Through a series of discussions, meetings, and site visits, the UEEP participants exchanged thoughts, views, and ideas as peers. They also gave and received feedback and evaluated their own learning process. Especially for PLN, the insights gained from these activities improve their confidence to overcome challenges they are facing in the process of transition into a modern utility company, which will ultimately result in increased reliance on renewable energy.

Following the U.S. delegation visit in March 2018, PLN requested USAID to extend opportunities for peer learning on critical topics. A specific area of interest for MEMR and PLN is identifying ways to improve the current Power Purchase Agreement (PPA) in the overall cycle of resource planning, procurement, contracting and operations.

The visit by Directorate General for Electricity of MEMR and PLN to California from August 11-18, 2018 is intended to fulfill this request and the program is designed to address specific issues identified by PLN. Participating in the weeklong program is three senior staff from MEMR and 12 senior officers from PLN working in responsible divisions throughout the cycle.