Experience with internal competition using the single buyer model in Jawa Bali - Indonesia

The world-wide restructuring of utilities made the Indonesian government to enact a new electricity law to prepare the staging of electricity restructuring in Indonesia. This law came into force in September 2002, as law no. 20/2002. But in December 2004, the law was annulled by the Constitutional Court, and the government went back to the previous law, which was the Law No. 15/1985. Instead of moving backwards to the 1985 power system production code, PLN decided to further develop the Single Buyer Model for the generation, transmission and distribution units owned by PLN. The single buyer model was stipulated in the Law No. 20/2002, and is not in conflict with law no. 15/1985. This paper describes the rule of the internal Single Buyer Model, and discusses the lessons learned from applying this model.