Utility firm urged to settle debt

By PETER ESILA
THE non-payment of power supplied by independent power producers (IPPs) to PNG Power Ltd (PPL) is an issue that must be addressed by all parties involved, an official says.
National Energy Authority (NEA) chairman Joseph Gabut said the big challenge for PPL was that the utility needed to have capacity to pay outstanding invoices for power already supplied by IPPs to PPL as well as new IPP invoices.
“NEA had a good virtual meeting with IP3 (IPP PNG industry group) last December, when we responded to all the issues raised by IP3,” he said.
“The pricing issue was not discussed by NEA and IP3, because it is an issue between PPL and individual IPPs. However, NEA is involved in setting the reference price for a project where there is a benchmark price and also where there is no benchmark price.”
IP3 chairman Dave Burbidge said the PNG Biomass Power Purchase Agreement (PPA) and the associated solar farm has been cancelled.
“The termination of PPAs no doubt creates risks in the minds of IPP financiers,” he said.
“It is an issue that must also be discussed in terms of PPL criteria used to approve PPAs.”
“It is also not clear what criteria was used by the Independent Consumer and Competition Commission (the regulator at that time) to set the reference price for the Biomass Project in Lae.
“No doubt the price in the Biomass project was considered later by PPL as too high and the PPA was terminated by the utility, affecting the solar project on the same land.”