Bekker discusses agreement

PNG Power Ltd (PPL) managing director Flagon Bekker says Power Purchase Agreement holders (PPAs) will cost taxpayers about K1.5 billion in subsidies over the next 15 to 20 years.
“The subsidies are benefiting a small group of investors,” he said.
“It is not spent on maintaining, improving or upgrading power grids.
“The balance in this relationship is preventing re-investments on power grids and systems nationwide.”
Bekker said PPL had been to a forum to discuss reform initiatives and the review of electricity costs.
“Independent Power Producers (IPPs) and PPL’s generation business unit will work in partnership to deliver affordable and reliable power to the grid and end-users or consumers,” he said.
“A big portion of the cost of power in the country is the negotiated terms and rates in the PPAs between PPL and the IPPs.
“A recent review has clearly revealed that the cost at which IPPs sell their power to PPL has a major impact on the final cost to consumers through subsidies.
“This also impacted businesses and other consumers.
“The power sector forum has been in works for a while and invitations were sent to the chairmen, managing – directors and shareholders of the power sector.
“It is the start of a long process in which PPL will represent and make the case for the people of PNG for lower and more affordable power prices.
“We do not see this as a series of meetings between PPL and IPPs but, rather, between the people of PNG and the IPPs.
“If successful, and if the IPPs approach the process with the understanding that the status quo cannot continue and are willing to compromise, the end result will be lower power rates for consumers.”