Electricity rates: regulator says drop ’em, utility companies say raise ’em

L. Arias September 28, 2015

Electricity rates for Costa Rican consumers are likely to change next month, but whether they’ll go up or down is anybody’s guess.

The Public Services Regulatory Authority (ARESEP) is considering a general cut in electricity rates for October thanks to recent savings from lesser-than-expected dependence on the country’s expensive thermal power plants. If the cut is approved, rates for customers of the Costa Rican Electricity Institute (ICE) could drop by 3.5 percent starting next month.

However, ICE and two other public utility companies have recently filed requests to increase the rates they charge customers. In August, the National Power and Light Company requested permission to raise its rates — by up to 35.5 percent — for its 500,000 customers mostly in the San José metropolitan area.

The Administrative Electricity Service of Cartago has requested to raise rates for its customers by 26.7 percent. And last Friday, ICE filed a request to raise rates by 8.27 percent for its 700,000 customers. The agency said its operating costs had risen and that it needed to purchase electricity from private generators.

In its petition to ARESEP, ICE said it needed to generate additional revenue in order to buy ₡30,133 million ($55 million) in electricity from private generators and spend ₡14,814 million ($27.4 million) for maintenance work on its distribution lines.

ICE also said it needs to spend ₡20,167 million ($37.3 million) to pay off debts and expand its power generation plan for next year, including to increase service coverage across the country.

ICE’s director of Financial Planning, Francisco Garro, said Friday that in spite of the rate hike request, the public electricity company would keep the government’s promise to maintain tariffs at below ₡91 ($0.17) per kilowatt-hour for the rest of the year.

Currently, ICE’s residential customers pay ₡81 ($0.15) for the first 200 kwh and ₡145.48 ($0.27) for additional kilowatt-hours, according to ARESEP data.