No menu items!

COSTA RICA'S LEADING ENGLISH LANGUAGE NEWSPAPER

HomeCosta RicaPresident Rodrigo Chaves announces major reform of the Costa Rican Electricity Institute

President Rodrigo Chaves announces major reform of the Costa Rican Electricity Institute

In his first hours as President of Costa Rica, Rodrigo Chaves Robles signed decrees and issued directives that imply a strong reform in the financial management of the Costa Rican Electricity Institute (ICE). These reforms will aim to improve data transparency and reduce the cost of electricity rates.

In addition, he ordered authorities from the Costa Rican Electricity Institute to transfer back to the Costa Rican government the 5G mobile frequencies the institution has withheld and refused to return to the previous administration. This must be done in a maximum of six months. The authorities will then decide if the 5G frequencies will be auctioned.

Particularly, three major reforms will be introduced:

  • The first one requires ICE to immediately apply International Financial Reporting Standards (IFRS)
  • The second one will reclassify operating leases to financial leases
  • The third is to “remove from the rate base costs associated with non-strategic assets that affect rates”

IFRS are international rules that standardize the accounting and financial results of companies. Their use prevents alternative interpretations of data, which guarantees the transparency of institutions’ finances.

By having assets as operating leases, all plant expenses are transferred to the electricity rates paid by users. This has been reported and criticized by the General Comptroller of the Republic (CGR) and the Chamber of Industries itself.

Chaves stated this Sunday that the Costa Rican Electricity Institute will have to adjust to these new standards and should request a reduction in electricity rates from the Public Services Regulatory Authority (Aresep).

“Look, those things don’t happen overnight. The Costa Rican Electricity Institute has to reclassify, really, it has to tell the truth with its financial statements. It has to make the accounting adjustments, it has to adopt the international financial reporting standards,” stated the President.

Chaves’ decree eliminates a previous one from the Ministry of Finance, dated May 2021, which exempted the Institute from complying with IFRS standards in its contracts signed before 2009. Now, the new order forces the Costa Rican Electricity Institute to “immediately” implement international financial standards regardless of the date.

The actions of the new head of the Costa Rican Electricity Institute remain uncertain and are likely to be unveiled during the upcoming weeks. Previously, he indicated he could not promise to reduce electricity rates.

Trending Now

Costa Rica President Confronts Calls to Strip Immunity

Costa Rican President Rodrigo Chaves denounced today an “attempted judicial coup” as he appeared before a congressional committee that must recommend to the full...

Costa Rica Replaces One-Lane Bridges as Traffic and Population Grow

As the infrastructure of Costa Rica advances, with new four-lane highways and a series of bypasses around San José that avoid the narrow, congested...

Costa Rica Issues Green Weather Alert as Heavy Rains Expected

The National Emergency Commission (CNE) has declared a green weather alert across Costa Rica due to the expected increase in rainfall over the coming...

US Cracks Down on Costa Rica’s Narco Network with New Sanctions

The US Treasury Department moved against a Costa Rican drug trafficking ring today sanctioning four individuals and two entities tied to cocaine smuggling and...

FBI Recordings Reveal Costa Rica Ex-Minister Celso Gamboa’s Drug Ties

Costa Rican authorities continue to hold former security minister Celso Gamboa in custody as U.S. officials push for his extradition on drug charges. Recent...

El Salvador Schools Enforce Military-Style Uniform Inspections

El Salvador's public schools will start enforcing daily inspections for students' uniforms and haircuts from August 20, as ordered by the new education minister,...
spot_img
Costa Rica Coffee Maker Chorreador
Costa Rica Coffee Maker Chorreador
Costa Rica Travel Insurance
Costa Rica Rocking Chait
Costa Rica Travel

Latest News from Costa Rica