AmCham proposes changes to draft decree on direct power purchase agreement

The American Chamber of Commerce has proposed the removal of ceiling prices from the draft decree on the direct power purchase agreement (DPPA).

The draft decree includes a term that stipulates when the spot price is beyond the ceiling price set by authorities, the payment will be calculated per the ceiling price and consumption over a certain period. AmCham stressed that this rule would negate consumers’ ability to hedge spot prices.

In reply, the drafting team said it wanted to keep the term because it would reduce the risk for consumers when spot prices were too high, according to documents from the Ministry of Justice.

AmCham also suggested that the draft decree should clarify terms related to the latest power development plan (PDP VIII). The chamber said that under PDP VIII, large solar power plants could only be developed after 2030 or per the previous PDP, restraining the development of solar power sector and DPPA. AmCham also recommended that authorities should discuss the possibility of amending PDP VIII.

In reply, the drafting team said it would consider changes to the draft decree.

Additionally, the U.S.-ASEAN Business Council stressed that the DPPA should provide participants with autonomy in implementation. For its part, the drafting team said the contract example in the draft decree was only for reference, and not an obligation to follow.

The Ministry of Industry and Trade has recently submitted its draft decree on the DPPA to the government for approval. The draft decree features five chapters, 50 terms, and five appendices. It has two types of power purchases via the national grid or via grids owned by DPPA participants.