A regulation for the implementation purposes of Law No. 30/2009 regarding Electricity was signed by the President on 12 March 2012. The regulation is Government Regulation No. 42/2012 regarding Cross-Border Power Sale and Purchase (the “Regulation”).
The Regulation basically stipulates that cross-border power sale and purchase, like exportation and importation of goods, are subject to the prevailing laws and regulations on customs.
Under the Regulation, cross-border sale of electricity may be conducted only if the following requirements are fulfilled: (i) the electricity needs of the respective area and its surrounding have been satisfied; (ii) the electricity sale prices are not subsidized; and (iii) the sale will not disturb the reliability of the local electricity supply. On the other hand, the conditions for cross-border electricity purchase are, among others: (i) the local electricity needs are not fully fulfilled; (ii) the purchase is made for the purpose of serving local electricity needs, or for the purpose of improving the quality and reliability of local electricity supply; and (iii) the purchase will not create dependency on electricity imports.
Cross-border electricity sale and purchase require a permit from the Minister in charge of electricity. Holders of these permits are obliged to submit semi-annual reports on their activities to the Minister.
The Regulation imposes certain requirements on cross-border electricity purchase, such as the requirement to obtain the Minister’s approval of the purchase price, which are not imposed on cross-border electricity sale.
The Regulation became immediately effective on the day of its issue.