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HomeTopicsExpat LivingBrace for Impact: Costa Rica's Electricity Rates to Soar by Up to...

Brace for Impact: Costa Rica’s Electricity Rates to Soar by Up to 26.6%

Electricity rates will increase in the country by between 15% and 20%, as confirmed by the Public Services Regulatory Authority (ARESEP) on Monday. The increase will be implemented by all distribution companies as of January 2025.

According to ARESEP, the increases are due to higher thermal energy consumption in 2023 and so far in 2024. The projected increases could be higher depending on the evolution of the generation system during the remainder of 2024.

Carlos Montenegro, Executive Director of the Costa Rican Chamber of Industries, fears that by the time the information is updated in May, the rates for end customers will increase by approximately 26.6%.

“We express our deep concern about the impact that the high level of spending on thermal generation and imports will have on electricity rates. From the Chamber, we ask for measures to be taken so that the increase in 2025 is not so steep and is distributed over 24 or more months,” he said.

As in the previous year, the Costa Rican Electricity Institue (ICE) has maintained an intensive use of hydrocarbons in 2024 to meet electricity demand and has sought to import as much energy as possible from the MER due to the critical condition of its hydroelectric generation reservoirs, which have historically supported consumption.

The Chamber of Industries reacted to the regulator’s announcement and warned that tariffs could actually increase by up to 26.6% if the impact of thermal generation for next year is considered, according to its estimates.

“We call for measures to be taken so that the increase in 2025 is not so steep and can be spread over 24 or more months,” the organization said in a statement. All users, including residential, industrial, and commercial sectors, will have to bear the costs associated with the increased thermal generation carried out by the ICE and the cost of imports in 2025.

The estimated amount to be passed on to subscribers throughout the country amounts to ¢193,000 million approximately $347.4 million) to be recognized by the ICE. However, Mario Mora, ARESEP’s Energy Manager, indicated on Monday that in the next few days a new assessment will be made with data up to May, so the amount could be higher.

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