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lbeit under strict regulations, the govern-ment will now allow private firms investing in electricity generation and distribution to export power.

The move is part of government efforts to attract private companies to participate in the power industry, something that did not happen under the monopoly state utility PT Perusahaan Listrik Negara (PLN).

The monopoly ended last week when the House of Representatives endorsed the electricity bill, opening up Indonesia's electricity procurement to private investors, regional cooperatives and local government.

The electricity law is designed to reduce dependence on government subsidies, expected this year to hit Rp 47.5 trillion (US$4.7 billion), down from Rp 82 trillion in 2008.

Despite government subsidies some parts of the country regularly suffer blackouts and about 35 percent of the population are not yet connected to the PLN grid.

Meanwhile PLN continues to make a loss every year.

J. Purwono, director general for electricity and energy utilization at the ministry, told reporters on Tuesday that Indonesia had potential for electricity exports to its neighbors.

"Both state power utility PLN and private businesses can export power. For example, if a company finds gas reserves in a border area and uses it to generate power, then the firm may export power to surrounding countries," Purwono said.

Exporting, however, would only be permitted if domestic supply had been fulfilled, Purwono said. Nevertheless, electricity exports could become a significant revenue contributor to power plants, he said adding the implementing regulation for power exports was being prepared.

Exporting power means private companies can sell electricity at a negotiated market price instead of using price mechanisms under the government's electricity subsidy.

As for importing electricity, it would remain controlled solely by PLN, Purwono said.

"We don't want our people to be power customers of firms from other countries. Thus, power imports and distribution can only be done by PLN," Purwono said.

He added that imports were only contemplated when domestic producers could not meet demand.

Since January this year, West Kalimantan receives power supplies from East Malaysia's Sarawak Energy Bhd (SEB) to anticipate a local power deficit of eight megawatts.