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Reward for those who save electricity demanded.
The Regulatory Authority for Public Services (ARESEP by its initials in Spanish) in Costa Rica, called on all electrical distributors in the country to offer homes optional rate systems that would allow them to save money if they consume energy out of “peak hours.”
Such systems set different rates depending on the time of consumption in order to reward those who use power during periods of the day with lower demand with lower rates.
The low periods are from 8 p. m. at 6 a. m. (night hours). They are also from 6 a. m. at 10 a. m. and 12:30 p. m. at 5:30 p. m., (these last two are called intermediate hours.)
The remaining time of the day is considered “peak hours.” During those periods, the price of electricity is more expensive because the country must use all of its petroleum burning plants to meet the energy demand.
Thermal power plants produce electricity at a cost seven times greater than hydroelectric plants. In contrast, during the night and intermediate hours the cost of generation is lowest.
In April, the ARESEP ordered the eight distributors in Costa Rica to propose hourly rates within six months, which expired at the end of October.
The electric cooperatives of San Carlos and Guanacaste (Coopelesca and Coopeguanacaste) met the deadline, while the Instituto Costarricense de Electricidad (ICE by its initials in Spanish) established a team to make its proposal. Next year, the ICE will spend ¢176 billion in purchasing fuel to generate light.
With the rates suggested by Coopeguanacaste, for example, a household that consumes 400 kilowatt hours per month would pay ¢22,700 instead of ¢ 6,000 if it uses the hourly rate in a rational way.
The companies that did not submit proposal are the administrative board of the Cartago Electric Service (Jasec by its initials in Spanish), the Public Service Company of Heredia (ESPH by its initials in Spanish), Coopesantos and Coopealfaroruiz.
For its part, the National Power and Light Company (CNFL by its initials in Spanish) is the only one that has had a system, called “tarifa residencial horaria, (Residential hourly rate,)” in place since 2004.
Nearly 3,700 homes in Costa Rica have joined the CNFL system and save, on average, 20% on their electric bills by reducing consumption during “peak hours.” The savings is equivalent to ¢10,000 per month. However, if a family consumes a lot during “peak hours,” the bill would be higher than what they would pay with standard rates.
The CNFL charges ¢86 per kw/h during “peak hours,” ¢35 during the two intermediate periods and ¢16 in the evening. The Company applies a surcharge, which depends on the level of consumption, based on those rates.
The CNFL and ICE are the electric distribution companies with the most customers. Each has about half a million subscribers.
Alvaro Barrantes, Energy Director at ARESEP, said the intention is to offer subscribers an alternative to lower consumption at a time when the price of light has shot up.
Just this year, electricity has had two increases. The first of these ranged between 11% and 72% and the second was 10%.
Barrantes said the impetus for the hourly rate is a regulatory policy that seeks to “rationalize demand.” He added that the power companies that did not submit their proposal will be issued a warning on non-compliance and possible sanctions will be assessed.
Barrantes said, by way of example that a possible sanction would be not to process their new applications for rate increases.
However, the ARESEP could give them another chance. “Given the complexity of the issue, they could be granted more time to fulfill this requirement, provided that the companies request it and justify it,” he said.
In this regard, Lissette Montoya, deputy manager of the ESPH, argued that the company first launched a process to differentiate their rates between summer and winter, and they would then analyze the matter of hourly rates.
Moreover, Barrantes said that the ARESEP opened a regular procedure for evaluating the proposals of Coopeguanacaste and Coopelesca to establish a system of hourly rates.
ARESEP hopes to have public hearings in January 2009 and make a decision in February.
At TicosLand.com we see this as a healthy initiative. Costa Rica requires implementation of systems that reward the good use of resources. This would be the beginning and would give many benefits to every family by easing their expenses. The rates in other countries are variable according to social class. We realize that this is a bit difficult in Costa Rica but wish that it would be applied.
There is more to read about Costa Rica and TicosLand.com in our internal blog. You are welcome to visit the leading web directory in Costa Rica and find out more about our country and its businesses.
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