Consumers Beware! Costa Rica Electricity Prices Not Expected to Drop Anytime Soon

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    The Costa Rica News (TCRN) – Achieving a reduction in electricity rates will not be effective in the short term, at least that´s what municipal electricity companies and cooperatives who formed the House Energy Distribution Companies and Telecommunications (CEDET) think.

    The main reason is founded in not lowering operating costs, coupled with the difficult climatic and natural conditions that the country is facing.

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    “It is necessary that the country knows the truth in time and through our business we pass the reliable information on to our customers, so that they don´t become exasperated and come into ridiculous assessments that may confuse them. The reality is that this country is used to pay for energy and development of the entire human daily activity … Families are not going to give up using the energy and neither the industry,” explained Allan Benavides, CEDET President and CEO of the Public Service Company of Heredia (ESPH).

    Benavides said that it is wrong to speculate on the population, making offers that can not be met. On the government’s decision not to lower the rates for a year and a half, the official did not conceal differences that might exist around certain objectives relating to the energy performance.

    “Companies need funds to operate, they require rates and development projects need to be financed. I feel that any situation that will make people believe that the rates will drop, should be avoided … That is not the situation, it is inevitable, rates will go up by a series of arguments and reasons that the people should know sooner or later,” Benavides determined.

    For ESPH, the manager said they are talking with the Public Utilities Regulatory Authority (Aresep) and with all market factors to ensure that the rates are just and necessary, not to ‘overdo things the government has been promising’.

    It’s possible, but in the medium term

    Omar Miranda, general manager of the Cooperative Rural Electrification of San Carlos (Coopelesca), explained that such measures must be taken to remove the fuel tax or the promotion of projects generating a cost reduction in the medium term. He cited as an example geothermal studies, natural gas or dam projects.

    “It’s complicated, lowering rates is not like making a campaign and say: Let’s lower rates! It is not necessary that the regulatory authority is asking for so many demands which does not add value and is a rather expensive service … We said that keeping the cost of fuel variable punishes Costa Rican families and businesses, plus it is too demotivating,” Miranda indicated.

    According to Miranda, diluting the variable cost of fuel in the next 18 months is a wise move by the government, because at that time the project „Reventazón“ will run with 300 megawatts of renewable energy available.

    “To say that today, the price will lower rates, is just not the case. The government believes that in those 18 months the rates won´t drop or contain stable … In the short term there are steps that could be taken but will not be made, the government will not remove the fuel tax”described the official.

    CEDET is comprised to Coopelesca, Coopesantos, Coopeguanacaste, Utility Board of Carthage (Jasec), the Public Service Company of Heredia (ESPH) and Cubujuquí Consortium.

    ICE produces 74% of the country’s energy, while cooperatives, municipal and private companies generate 7.53%. According to the report on generation and demand of ICE, for the year 2013.

    The Costa Rica News (TCRN)

    San Jose, Costa Rica

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