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Regulatory agency drops electricity rates for all distributors in Costa Rica

September 29, 2014

A day after it approved rate hikes last week for the Costa Rican Electricity Institute, or ICE, the Public Services Regulatory Authority (ARESEP) on Friday approved a decrease in electricity rates for all of the country’s electricity distributors. That change will take effect on Oct. 1.

The rate change is a result of a formula ARESEP uses called the Variable Cost of Fuels. That variable takes into consideration the cost of oil purchases needed for thermal generation, and it applies to all electricity distributors in the country.

Calculations for the last quarter resulted in rate decreases by up to 6.8 percent, depending on the distributor, and followed increased rainfall that helped replenish water reserves for hydroelectric power generation.

National Power and Light Company (CNFL) customers will see the biggest rate cut at 6.8 percent. ICE customers will receive a 3.5 percent rate cut, following ARESEP’s approval last Thursday of a 3.7 percent increase for the next quarter to subsidize electricity importation. Customers of Heredia’s Public Service Company will see a 5.51 percent rate decrease, and rates from the Administrative Electricity Service of Cartago will drop by 6.51 percent.

Last Friday, ARESEP officials said in a press release that they are concerned about “ongoing increases in electricity rates in recent years.” The agency said it had begun to take steps to better control rates hikes. ARESEP said it would seek to import more electricity “to replace inefficient thermal generation, whose marginal costs are higher than those of imported energy.” ARESEP also said it hoped to boost electricity exports to generate more revenue.

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