1. Introduction

ASEAN Regulators Forum was held on 21-22 February 2008 at PLN Head Office, Jakarta, Indonesia.

2. Delegates

Participants included delegates from Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. The list of delegates is given in Appendix A.

3. HAPUA Secretary in Charge Report

Mr Syaiful Bahri Ibrahim as the Secretary HAPUA in charge welcomed all the participants including delegations from ASEAN member countries. He informed that the aims of the forum as mentioned in TOR of Working Group Number 5 are:
“First, to share strategies, policies, and expresses on common issues and challenges in regulating of energy development and restructuring in the ASEAN.
Second, to share and define best practices in regulating the generation, transmission, distribution, and supply all sectors of the industry.
Third, to identify the regulatory issues and concerns that all regulatory issues change the balance of investors and consumers interest, and to develop to provide networking of opportunities for regulators”.

He believed that all participants would participate actively on the discussion with the aim to achieve the common objective of successful development of the power sector and cooperation of member countries and to establish the ASEAN Power Grid in the near future.

4. Welcome Speech

Dr. Herman Darnel Ibrahim, the Director Transmission & Distribution of PLN, on behalf of the management of PLN Head Office, extended his most cordial welcome to all the delegates to Jakarta which is also the headquarter of PLN.
He expressed that it was pleasure to him to have the attendance of many delegates from all ASEAN member countries in Jakarta, and it was a great privilege for PLN Head Office to host the forum.
He understood that ASEAN Regulators Forum is held in the true spirit of ASEAN Cooperation and Solidarity by every member countries to support the realization of ASEAN Power Grid that all have already committed to be completed in the year 2015.
He believed that all participants would discuss and exchange views very openly and friendly with common objective of successful development of power sector and cooperation of member countries in the region. He truly hoped that the fruitful outcome will benefit all the member countries, and this forum will meet its objective.

5. Opening Speech

Mr Purnomo Yusgiantoro, the Minister of Energy & Mineral Resources, expressed his honoured to joint with the forum in the opportunity to deliver welcoming speech in the ASEAN Regulators Forum. On the event, on behalf of the government, he conveyed cordial welcome to all who attending the forum.
He also expressed his deep gratitude to the HAPUA Council, ASEAN Council, ASEAN Secretariat and ASEAN Center for Energy in preparations of the forum meeting.
He explained the progress of ASEAN Energy Cooperation especially ASEAN Trans Energy Networks. Despite the ASEAN Energy Agreement was signed in Manila of 24th, June, 1986, the enhancement of ASEAN Energy Cooperation has more significant achieved when the ASEAN Vision 2020 was adopted in informal summit ASEAN leaders meeting in 15th of December 1997 in Malaysia.
One significant point regarding the regional energy development that can be noted through the ASEAN Vision 2020 was the calling of establishment of Trans ASEAN Energy Networks (TATP) as part of Trans ASEAN Network. As we all know MOU Trans ASEAN Gas pipe and Project was signed in 2002 in Bali and has been ratified and accepted by all ASEAN member countries.
He said that ASEAN member countries recognized that regional energy cooperation through the Trans Energy Networks will create economic benefit opportunity for energy exchange and trade among member countries.
Government as regulators shall have significant role for example the electricity planning, saving pricing policy, as well as providing condusive environmental for power business.
He hoped that ASEAN Regulators Forum could discuss a number of important issues as potential cross border, energy market, also harmonizing cross border regulations and policies.
He reminded that the Forum as value to all parts to gathering the energy regulators in ASEAN region, to share the knowledge, experience, and resources in establishing effective, predictable, regulatory frameworks and their legislations, roles, structures, managements, financing and coordination that attract investment and protect consumers in electricity.
He appreciated to ASEAN Senior Officials on Energy for their effort and role regarding the share notification, endorsement, decision and recommendation on numerous regional collaborative meeting and forum from the Senior Official Meeting on the energy and ASEAN Policy Governing Group as well as their strong leadership as council members of ASEAN Member Energy Facilitators in ECA Governing Council Meeting.
He convinced that the two days meeting all participants can share the breakthrough ideas, knowledge, and experiences to provide concrete program to make this forum as the venue of big step toward ASEAN Energy Cooperation.
He then declared the ASEAN Regulators Forum was opened.

6. Keynote Speech

BY JEAN SENOT – RTE FRANCE

RTE (Reseau de Transport d’Electricite) is a major actor in the implementation of a liberalized European market, a World Trend which started in 1990.

To create working electricity market, the European countries has to address five important issues:
1. The Third Party Access (TPA) issue
2 .The price reference issue
3. The regulatory issue
4. The unbundling issue
5. The scope of activities

Activities of RTE are:
1. Management of assets.
Related issue: reliability of the grid and acceptance of transmission facilities

2. Management of electricity flows through the grid.
Related issue : secure operation of the system B

3. Management of grid access.
Related issue: non discrimination, significant contribution to the creation of a European Electricity Market

Short term & mid term issues of RTE:
- gets RTE budget and accounts
- approves RTE annual investment program
- approves unbundling rules
- settles disputes between RTE and system users
- proposes system use tariffs to energy minister

Long term issues:
- receives the generation adequacy report
- approves transmission grid development plan
- adopts standard concession terms and conditions of the transmission grid

The RTE commitment towards the regulator:
1. Rentability on Capital Employed (ROCE)
    7,25% per Year (before legal corporate tax) from 2006 for a period of 2 years

2. The cost of transmission per kWh
     Within the new tariff, in force since 01/01/2006, the regulator has requested a decrease of 3% per year (in current €)      on staff expenses and other operation expenses

The European Interconnection
Began in 1920, to take advantage of the Swiss hydro power, and went on from 1949 till now to improve the security of the systems and to have commercial exchanges between integrated utilities.

That led to the creation of one the biggest and most secure synchronous system in the world:
- 24 interconnected countries
- 400 Million people
- 2100TWh of consumption

Access to the European interconnections
- Redispatching financed through network access tariffs
- First arrived / First served
- Prorata system
- Explicit auctions
- Coordinated explicit auctions between at least 3 TSOs
- Implicit auctions for physical capacities (through energy price)

Two keywords for E.U. market
1. Transparency:

a. Regulated third party access to the grid
(publication of access rules and tariffs)
b. Real independence of TSOs
c. Independent regulatory authority

2. Harmonization:

a. Harmonisation of access rules and tariffs
b. Harmonisation of regulators’ prerogatives
c. Harmonisation of market rules

The legal context of the European Liberalization

First European Directive 96/92 of December 19, 1996
Creation of unbundled TSOs in charge of maintaining, operating and developing the transmission networks and allowing a non discriminatory third party access to these networks

Second European Directive 2003-54 of June 26, 2003
The independence of the TSOs has been increased by enforcing their incorporation where that was not the case (France)

Third Energy Package of September 19, 2007
o Total unbundling of Transmission System Operators
o Harmonising and strengthening the powers and duties of national regulators
o Reinforcement of the cooperation between European TSOs through the establishment of a European Network for Transmission System Operators

7. Summary and Discussion of ASEAN Electricity Sector Regulation

7. 1. BRUNEI DARUSSALAM

Presented by Pangeran Jamra W.bin Pangeran Haji Petra
(The Department of Electrical Services/DES
Prime Minsiter’s Office, Brunei Darussalam)

Currently Brunei has seven operating power stations. In the eastern part Brunei has four power stations in Gadong area. One power station is located at the western part of the country, i.e. Lumut Co-Gen. In Brunei Darussalam, the Department of Electrical Services (DES) is placed under the Minister of Energy, at the Prime Minister Office.

The regulating authority has some functions for example:
1. Advise the government/minister on policies and strategies relating to energy issues that specific to power and on matters pertaining to the regulatory body.
2. Advise the government/minister on matters relating to the generation, transmission, distribution, trading, retail, and use of electricity
3. Exercise and enforce Electricity Act as well as regulations.
4. Address the interest of stakeholders and utility with regards to
- The prices charged and other terms for the supply of electricity.
- The security, reliability, availability and continuity of electricity supply.
- The electricity services provided
5. Promote the efficient use of electricity (Demand Side Management)
6. Recommended regulatory framework in respect of the generation, transmission, possible import and export.
7. Protect the public from dangers arising from the generation, transmission, supply or use of electricity.
8. Coordinate various activities with regard to supply infrastructure planning (such as supply security & sufficiency) & implementation, efficiency, etc, that undertaken in the electricity sector.

To materialized the ASEAN POWER GRID (APG), Brunei recognizes and anticipates there are several cross border issues that need to be addressed such as:
* Taxation (Such as possibility of Double Taxation Agreement or chances to income tax issue)
* Funding & Investment (E.q. flow of funds)
* Access to Restricted & Confidential Information (Market transaction; Bilateral Contracts & other documents).
* Manpower (Flow of technical & management personnel into
member countries.
* Restriction on import and export on the sale of electricity
* Custom duties
* Customer protection and safety standards
* Open Access & Market Liberalization

On resolving these issues, the energy authority need to seek involvement of other relevant government agencies, for example PMO, Labour Department, Custom & Excise Department, JPKE, MOFAT, ISD, etc.

In summary, there are challenges that should be addressed and resolved, for example, how to harmonize issues on technical matters, commercial, legal & regulatory aspects.

Brunei Darussalam also acknowledge the different level of ESI development and maturity in the ASEAN member countries.

7.2. CAMBODIA

ELECTRICITY AUTHORITY OF CAMBODIA (EAC) AND REGULATION OF ELETRICITY SECTOR IN CAMBODIA

Mr Hul Kunnak Uuth, delegate from Electricity Authority of Cambodia (EAC), explained about the framework of the electric power supply and services by EAC.

EAC has an autonomous budget for its operation; funded by fees paid by applicants and licensees to EAC. Annual financial statements and books of account audited by auditor and inspected by National Audit Authority. An autonomous budget helps EAC to be independent in its operations. Transparency in decision making is also ensured by EAC.

Regulations and procedures such as general conditions of supply of electricity in the Kingdom of Cambodia issued by EAC. It also regulate about overall performance standards of electricity suppliers, electricity tariff, numerous procedures of licenses, and publishes some documents about power sector.

So far, EAC has issued 192 licenses, as an official permission which EAC decides to grant to physical or legal person for having the right to provide electric power service in accordance with the requirements of the license.
It also review and determine tariff for supply to consumers and other services; approve power purchase agreements. Annual report published by EAC to promote transparency of power supply and services in Cambodia.

7.3. INDONESIA

Country Report Summary Indonesia

HIGHLIGHT ISSUE
- Demand for electricity grows at a high rate
- Dependency on oil resource for power generation
- Lack of new investments
- Shortage of electricity supply in several provinces, esp. outer islands
- The New Electricity Law is being processed

STRATEGY
- The creation of more efficient, transparent investment policy
- The achievement of self-financing power sector development and the fulfillment of electricity demand and supply.
- More active private sector participation in investment and development of electric power projects in Indonesia.
- Private Investments should comply with Indonesian’s law and regulations.

TARGET
To reduce the dependency to oil for power generation, approximated 10.000 MW coal fired power plants included transmission line will be built in Java-Bali and outside Java-Bali

Considering the limited resources of fund for power sector development, private sector participations will be encouraged, meanwhile the new policy is being processed which will be more efficient and transparent. Purpose for the revision of the law is to attract more new investment

7.4. LAO PDR
REGULATION OF THE ELECTRICITY SECTOR IN LAO PDR.

OBJECTIVES OF THE POWER SECTOR DEVELOPMENT
Explore and exploit mutually beneficial cross border exchanges of electricity with neighbouring countries of the sub-region;

POLICY FRAMEWORK
- Maintain and expand an affordable, reliable and sustainable electricity supply to promote economic and social development;

- Promote exports of electricity to earn revenues to meet the Government development objectives, with particular emphasis on poverty eradication;

- Develop and enhance the legal and regulatory framework to facilitate power sector development by both public and private parties;

- Strengthen institutional structures, clarify responsibilities, streamline administration and foster commercialization;

DUTIES AND RIGHTS OF MINISTER OF ENERGY AND MINES ON POWER SECTOR

- DOE, DEPD administrate power sector in Lao PDR.

- Managing information related to power sector.

- Drafting policies, master plans, and 5-year plan.

- Drafting and implementing laws and regulations related to power sector.

- Technical advice to provincial and district offices.

UP TO 1997, THE SYSTEM WAS FULLY MONOPOLI BY EDL,
FROM 1997, SOME MULTIPLE PLAYERS HAVE BEEN PARTICIPATED

7.5. MALAYSIA
MALAYSIA

- Energy Commission
- Historical development
From the Electrical Inspectorate within the Ministry of Energy, become the Energy Commission through the Energy Commission Act 2001

- Vision & Mission
Vision: strives to be a highly recognized and effective energy regulator as well as the authority on energy matters.
Mission: aims to balance the needs of consumers and providers of energy to ensure safe and reliable supply at reasonable prices; protect public interest; foster economic development and competitive markets in an environmentally sound manner.

- General Function:
1. Advise Minister concerned on all matters relating to energy supply activities
2. Implement and enforce the energy supply laws
3. Review energy supply laws and make necessary recommendation to Minister
4. Protect consumers’ interests
5. Promote use of renewable energy (RE), energy efficiency and conservation of non-RE
6. Promote research and development of new techniques
7. Encourage and promote self-regulation in electricity supply and gas supply through pipelines

- Governance

a). Rationale for Introducing IPPs to Malaysia

• Double digit demand growth rate
• Reaction to several blackouts & inadequate capacity
• Generation investment very capital intensive

o Public sector funding have:

a). Limited capacity
b). Other more competing needs

• Transfer funding responsibility to private sector

o Innovations in project finance
o Availability of local domestic capital

• Generation sector most appropriate for competition & private sector participation

b). Future development

• Harmonisation of PPA terms:

o Fully dispatchable plants
o Two-tier capacity payments with demand risk sharing
o Market pricing of fuels.

• Tariff to consumers to be adjusted more frequently in line with supply costs. Costs volatility to be managed    through stabilising mechanism
• Subsidy on gas price to be slowly lifted in line with off-taker’s / consumers’ affordability
• Over-dependency on particular fuel, excessive capacity margin, transmission bottlenecks & supply reliability to    be better managed through good planning

c). Closure

• The concerns of the electricity supply industry now covers:

o Supply adequacy
o Supply reliability
o Supply quality
o Supply security / Sustainability of supply
o Environmental impact / Contributions to climate change

• Industry need to rise to these prevailing / new challenges.

7.6. MYANMAR

a). Industry Structure
In order to promote power sector effectively, The Ministry of Electric Power has been expanded to two separate ministries as Ministry of Electric Power 1 and Ministry of Electric Power 2 on 15 May, 2006.

b). Responsibility of Ministry of Electric Power 1
- Development of new hydroelectric power projects.
- Operation and maintenance of existing hydroelectric power stations and coal fired thermal power station.
- Selling electricity to Ministry of Electric Power 2.

c). Responsibility of Ministry of Electric Power 2
- Operation and maintenance of gas turbine, combined cycle and thermal power stations.
- Planning and implementation of transmission lines compliance with the generation plan of both ministries.
- Purchasing electricity from Ministry of Electric Power 1.
- Planning and implementation of distribution system and selling electricity to end users.

d). Electricity Law

• Electricity Law (enacted in 1984)

Cabinet of the government shall grant the permission to carry out:

a. exploration of resources for electricity generation
b. generation of electricity
c. transmission of electricity
d. distribution of electricity

to the following organization and individuals

- state owned utilities
- state owned industries
- legal cooperative groups
- legal private organizations
- other organizations

• The board of Yangon City Electric Power Supply Law (enacted in 2005)

e). Local Power Trade
According to the board of Yangon City Electric Power Supply Law, can purchase electricity at the price approved by the Ministry.

f). International Power Trade
At present, mostly cross-border small scale power purchase from Thailand and China existed upon approval of Ministry and government.
In the near future, power purchase from Shweli Hydropower Project which was invested by China, Tasang Hydropower Project which was invested by MDX Group of Company will be realized.

g). Regulatory Framework
As electricity business has been subsidized by the government long ago, Ministry of Electric Power 1 and 2 in accordance with the guidance of the Government take the responsibilities of Regulator.

H). Reforms
• Generation sectors
Local investors are allowed to participate in the scheme of independent power producer (IPP) for medium size hydropower project.
Foreign investors are allowed to participate in the scheme of joint venture development of hydropower project.
• Distribution sectors
Yangon City Electricity Supply Board is pilot project towards privatization.
Under the guidance of Ministry of Electric Power 2, if performance of YESB found ok, then Mandalay City Electricity Supply Board will follow.

i). Competition
• Currently, competition between state owned generation sector and IPPs, and between IPPs.
• Competition between state owned distribution utility and self funded distribution utility, and between self funded utility; will be realized soon.

j). Supply
Still suffer shortage of supply especially in dry season because of seasonal generation pattern of hydropower plants.
Generation expansion plan concentrated on hydropower project.

k). Challenges in regulation
• Policy of Myanmar power sector is changing gradually towards privatization
• Regulation for new system is not ready yet and a lot of regulatory challenges ahead.
• The forum is the opportunity to learn experiences of other ASEAN countries on regulatory issues.

7.7. PHILIPPINES

ENERGY REGULATORY COMMISSION (ERC) of PHILIPPINES

ERC was created under the Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA) to encourage market development, ensure customer choice, and penalize abuse of market power.

It determines, fix, and approve after due notice and hearing, rates and charges of NPC, TRANSCO, Distribution Utilities and Electric Cooperatives. ERC also approves application for, issue, grant, revoke, review and modify Certificate of Public Convenience & Necessity (CPCN) and Certificate of Compliance (COC), etc. It promulgates and enforce Philippine Grid Code and Distribution Code and some other functions.

ERC has some major objectives eq to promulgate or approve rules, regulations, guidelines and policies; enforce rules and regulations including issuance of operating permits and licenses; resolving cases and disputes and to promoting consumer interest.

The entities subject to ERC regulation, such as National Power Corporation (RORB), National Transmission Corporation (Performance Based), Electric Cooperatives/Distributions Utilities, Wholesale Supplier/RES/Aggregators, Ancillary Service Providers.

ERC has some regulatory functions:
• For main Grid: Determines, fixes, and approves the rate methodologies on the basic generation charge (RORB-TOU), adjustment mechanisms, and franchise benefits to host communities.
• For SPUG: Determines, fixes and approves the SAGR, UCME, and other rate adjustment mechanisms.

There are also some regulatory procedures followed by NPC:
• Compliance with the rate filing procedures per EPIRA (use of ERC approved methodology, publication of application, provision of copies of applications to LGUs, conduct of public hearings)
• Compliance with ERC Rules of Practices and Procedures (pleading, pr-filing requirements, amendments to pleading, summary proceeding, Rules of Evidences)

7.8. SINGAPORE

SINGAPORE ELECTRICITY REGULATOR

The electricity industry has traditionally been vertically integrated and government owned. Before 1995, the Public Utilities Board (PUB) has been responsible for electricity generation, transmission, and distribution. The process of electricity liberalization started in 1995 and it has been a lengthy process. The focus has been on opening the electricity market and breaking up the verticle integration at the ownership level.

The energy regulator, Energy Market Authority, was set up in 2001 and reports to the Ministry of Trade and Industry. As result of liberalization, generation companies today bid to sell into a wholesale market, and large consumers (e.g. companies) have a choice to buy electricity from retailers or directly from the wholesale market.

7.9. THAILAND

HIGHLIGHT ISSUE

The Current Electricity Supply Industry (ESI) Structure will be upgraded into the new structure.

Energy Industry Act B.E. 2550 (2007) has come into force since 11 December 2007.

The Chairman and six other members of the Energy Regulatory Board (ERB) who have responsible for regulating the electricity and natural gas industry under the policy framework of the government. Herewith major authority and duties of the board:

• Issue an announcement determining the types of licenses for energy industry operation
• Regulate tariffs of energy industry operators
• Regulate the issuance of Requests for Proposals for the purchase of power as well as monitor the selection procedures to ensure fairness for all stakeholders

In relate with license issuance for Energy Industry Operation, the Board shall announce and determine the type and validity period of license that corresponds with the capacity and characteristics of individual energy industry categories.
- Taken into account are the impact on the people, the worthiness in the economic, social and investment aspects, including the competitive features of each business category. Conditions to be exclusively applied may also be specified.
- The determination of categories, capacities and characteristics of the energy industry that are exempt from the license requirement shall be promulgated through the issuance of a Royal Decree.

The Energy Regulatory Office

• To assist with the work of the Board, the Energy Regulatory Office will be established, being a state entity with the status of a juristic person, and will be under the supervision of the Board.
• The Office will have the following power and duties:
- To be responsible for the administrative work of the Board
- To receive fees as specified by law or determined by the Board
- To receive petitions concerning the energy industry operation

ENERGY CONSUMER PROTECTION

- Service Standards and Service Extension
- The Power Development Fund
- Regional Energy Consumer Committees

POWER DEVELOPMENT FUND is created with purpose as:
Promote the use of renewable energy and technologies in the electricity industry operation that have less impact on the environment, with due consideration on the balance of natural resources; and to create fairness for power consumers.

7.10. VIETNAM

CURRENT SITUATION
EVN as a single buyer
Sales average is 15% and lost 10.5% based on data 2006

TARGET
• To create competitive retail market
• Maximize the usage of the coal
• Competitive generation market based on regulatory authority
• Power Generation Development plans will involve the nuclear power and power imported.

INSTITUTIONAL REGULATION
• Electricity Law: effective from July 2005
• Electricity Regulatory Authority of Vietnam: established in 2006
• Grid Code
• Network Connection Rules
• Market Rules
• Metering Code

8. Summary of Panel Discussion on ASEAN Electricity Interconnection

GROUP A

On the discussion that was led by Chairman from Thailand, Prutichai Chonglertvanichkul, delegations from six countries (Cambodia, Lao PDR, Malaysia, Myanmar, Thailand and Vietnam) reviewed about harmonization of legal and regulatory framework for bilateral and cross border power interconnection and trade to include Taxation, Tariff and Third Party Access of the sub-region.

The Chairman mentioned that there should be a harmonization through consultation on three aspects:

1. Legal and regulatory framework
2. Tariff and Taxation
3. Tariff and Third Party Access

1. LEGAL and REGULATORY FRAMEWORK

At present, the ESI structure in ASEAN countries differ from country to country. Some countries, like Cambodia and Thailand, the regulatory is independent from Ministry of Energy while the other country the regulatory under the Ministry of Energy. In some countries, the policy maker is also the regulator while other countries may have separate body.

With the above differences, harmonization of regulatory framework is required and maybe done in the same way as that in the GMS sub-region where the third party that is ADB will provide technical assistance to study the harmonization of regulatory and legal framework within the GMS countries. Other countries in ASEAN may follow on this method while giving considerations on bilateral cooperation.

But it should be understood that harmonization isn’t an effort to make regulations become similar in every countries.

2. TARIFF and TAXATION

Some ASEAN countries have import and/or export tax of power with different rate, while some other not have.

Based on different taxation, there should harmonize taxation policy with possibility of free power trading in the future.

The harmonization of tariff structure should apply common principle for the whole ASEAN countries.

GROUP B

PENINSULAR MALAYSIA, SINGAPORE and SUMATRA, CHAIRED BY MALAYSIA ( Y. BHG DATO’ PIAN BIN SUKRO)

The group discussed and agreed that Energy Cooperation and Trade among ASEAN members can be facilitated through three stages, ie:
1. Bilateral Arrangement
2. Third Party Access/Multi Lateral Arrangement
3. Competitive market

This is due to the fact that there are existing bilateral arrangement between Malaysia-Singapore and Malaysia-Thailand. The next phase of cooperation can be through Multilateral Trading / Party Access and competitive market access when the various segments of the ASEAN power grid are built.

BILATERAL ARRANGEMENT

For the Malaysia and Singapore link there is already an existing bilateral arrangement. For the power exchange to move to the next plane, involving bidding into the Singapore pool system or vice-versa, the parties can utilize the existing platform and discuss the commercial terms.

For Malaysia and Sumatra link, the group agreed, there is a need for Indonesia to expedite this matter and resolve issues problem with taxation. From the Malaysia side, both the government and the regulator have no objection to its implementation. For Indonesia side, there is a need to engage the government agencies by explaining to them the rationale and benefits to be derived from the project.

The MOU on ASEAN power grid is done on G-G basis (government to government). For the APG realized expeditiously, there is a need to have B-B (business to business) arrangement to facilitate the implementation to various links

HAPUA is merely an association of electricity utilities. It does not have the power to direct the government agencies concerned. IT is PLN that need to expedite this process of buy-in of the Government Agencies concerned.

In this context, the group agreed that PLN convene a meeting as soon as possible to iron out any difficulties. This is to ensure the speedy construction of this link.

3. THIRD PARTY ACCESS

The policy of Third Party Access should be common for every country.
The transmission wheeling charge must be based on the common principle for ASEAN countries.

GROUP C

Brunei, The Philipines, Sabah, Serawak, and West Kalimantan
Chaired by Mr. Mohammad Nur Hidayat.

Issues on the Cross Boarder Trans Borneo – Philipines:

1. Opponent and regulatory issues
2. Market issues
3. Commercial issues
4. Technical issues
5. Transmission issues
6. Barriers to develop the cross boarder:
a. Policy
b. Structural and regulatory
c. Technical
d. Commercial
e. Legal

These barriers were purposed by the consultant who is signed as the consultant to study the cross boarder matters.

In making the Cross Boarder Trans Borneo happens we need to divide it into 3 levels/ stages based on the priority:
1. Borneo, Serawak, Kalimantan, Kucing and Pontianak
2. Borneo, Serawak, Sabah and Brunai
3. Trans Borneo – Philipines through Palawan City

TAXATION

1. Need to identify, understand and analyze the matters carefully. Zoom in and brainstorm all the things related to decision of the tax in the Cross Boarder Trans Borneo.
2. Question occurs in tax matters is if there will be any private organization/ undertaking, will there be changes in the tax policy?
3. Focus on the bilateral and make it as high priority then can come to the multilateral.
4. Tax is under commercial matters and needs government advice since it relates to each country policy.
5. Tax free and each member needs to convince their own government since we need to redefine Electricity not as the commodity however it supposed to be treated service (supported by AFTA agreement that electricity is not commodity).

TARIFF
1. Each country has its own tariff, however it will be designed again later on based on the agreement of the bilateral and multilateral.
2. There should be a formula to define the tax and electricity tariff.
3. There should be an agreement and requirement between two governments as it involves huge investments.

THIRD PARTIES

When all bilateral are established already, then we can move to the level of multilateral. Then the next level will be to determine the formula for the third parties.

REGULATION
1. Different regulation may have different agreement regarding transmitting the energy, there is need to purpose the forecast Capital Expenditure to the government. This is also to cover the expenditure of expanding new project for the next 5 years.
2. Putting up regulation for the power supply in all regions.
3. There are 2 aspects that should be considered :
a. Approval: There should be an approval from the respective country and this will help to expand the project.
b. License of the ownership. Interconnection has to be happened between the countries and make the regulation uniform and transparent for all countries.
4. There is a supporting document on the License of ownership (for internal structure of energy department). Focus on the establishment of short term (bilateral) first, how to expand the system in bilateral then we can go to the long term. Here each government need to sit down and discussed the rules and regulations in the projects. By recognizing our current stage than thinking something far is better for the expanding the projects.
5. However, we need to decluster the problems before we see the whole matters so that we can focus on the matters, example Malaysia and Indonesia.

All Chairman of group discussions on ASEAN Electricity Interconnection-Three Subsystem reported all their review results on harmonization of legal and regulatory framework for bilateral and cross border power interconnection and trade to include Taxation, Tariff and Third Party Access of the sub-region.

They agreed that all discussion results on ASEAN Electricity Interconnection would be discuss in the First Meeting of Utility & Government Members of the ASEAN Power Grid Consultative Committee (APGCC), at the afternoon.

9. Closing Speech

1. Summary of Panel Discussions

All Chairman of group discussions on ASEAN Electricity Interconnection-Three Subsystem reported all their review results on harmonization of legal and regulatory framework for bilateral and cross border power interconnection and trade to include Taxation, Tariff and Third Party Access of the sub-region.

They agreed that all discussion results on ASEAN Electricity Interconnection would be discuss in the First Meeting of Utility & Government Members of the ASEAN Power Grid Consultative Committee (APGCC), at the afternoon.

2. Closing Speech

Mr. Bambang Hermawanto, Deputy Director of Planning System, on behalf Director of Transmission and Distribution, hoped that all information from ASEAN Regulators Forum meetings can be used to go further on realizing the ASEAN Power Grid (APG).

On behalf of PLN, he’d like to thanks all of contributions from the forum.

He expressed his apologized for any unconvenience in the forum that was host by PLN Head Office, Jakarta, Indonesia.

He mentioned that ASEAN Regulators Forum continued with the First Meeting of Utility & Government Members of the ASEAN Power Grid Consultative Committee (APGCC), at the afternoon.

He expressed his heartful thanks to all delegations that makes the meeting success.

He then declared ASEAN Regulators Forum was closed.