Big Energy Users in Costa Rica are Outraged They Will Pay More Over the Coming Months

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    The Costa Rica News (TCRN) – The decision of the government of the Republic not to proceed with a reduction in the price of electricity in the next 18 months will cause irreversible damage to the national economy. At least, that´s what the Costa Rican Association of Large Energy Consumers (Acograce) believes.

    Since last July 1 customers that were served by the Instituto Costarricense de Electricidad (ICE), had to adapt to a 5.32% increase. This rate will not have sales in the next year and a half despite Luis Guillermo Solís, president, had defined among his first actions that he would lower the price of electricity rates.

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    “The damage to the national economy to keep electric rates as high for a year and a half is irreversible. If a company, in a year and a half, has to pay electricity costs so high and in 2016-2017 they set measurements up for lowering the rate, for what? Many companies have closed or gone,” indicated Carlos Roldan, CEO of Acograce.

    According to ICE, the increase that went into effect, will remain unchanged until December 31, 2015. “With this rate, the company guarantees the recovery of costs by buying fuel-to-heat generation and power import 2014 and 2015,” they said.

    Users of the National Power and Light Company (CNFL) are paying an additional 4.3% that will also be maintained for the next year and a half. According to Roldan as a consequence one neither can opt for alternative plans to reduce energy consumption.

    “From ICE costs, fuel is important, wiht 20%, but we gain nothing by saving energy if the fixed costs of ICE continue having to be payed. We must do everything to make the system the most efficient, so that the tarifs realy drop because otherwise for many of us, even if we make the most efficient use, nothing benefits. If this happens, demand will grow less and ICE will have to raise rates to cover their fixed costs. In the end, there is less power consumption that will be more expensive” quoted Roldán.

    More demand is the key

    According Acograce, ideal would be if ICE had an increased energy demand so that these fixed costs dissolve. In that sense they have raised the government’s export goals of more aggressive energy.

    “The Public Utilities Regulatory Authority (Aresep) was raised to the variable cost of fuel that will freeze for a year and the ICE cooperates via exports, once they enter the new hydro projects. They will get additional 800 MW of generation system and the application does not even grow by 20%, then all these surpluses can be used to export electricity. That will generate additional revenue to ICE that allows lower rates, ” Roldan explained.

    Government at crossroads

    Although Solis said that among his first actions would be to reduce this area, in fact his first action was to form a committee to evaluate the energy issue. Added to this, Melvin Jimenez, Minister of the Presidency, hesitated and said recently that they were falling into the account that the rates were not under government control.

    “We are now realizing that they (tariffs) are not under our control. We are calling on the relevant authorities to clarify the methodologies and elements involved. And for our part we are studying the costs of institutions, to see if these costs are affecting in their methodology, so that they can be adjusted and we can fulfill the commitment that we made, ” said Jimenez, July 3.

    MPs also criticized the situation and called for specific measures such as of the production of natural gas or biomass. In addition, some, like the Libertarian Otto Guevara, urged the electrical project contingency.

    The business sector in the country endorsed that the government signed a guideline to create a commission that will determine the next steps to curb the rise in the price of electricity. However, they said that they should not wait 18 months to see results, but take the actions they see in the shortest time possible.

    The Costa Rica News (TCRN)

    San Jose, Costa Rica

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