Possible Increase in Electricity Rates

The Costa Rican Electricity Institute (ICE) intends for its residential customers to pay about 25% more in electricity rates, beginning in March 2010 in Costa Rica.

According to the latest request, the Institute asked for a 24.24% increase in electricity consumption rates in homes and apartments.

This means that a household using 200 kilowatt hours per month (kW/h), would have to pay ¢14,660 instead of the ¢11,800 they are currently paying. Using another example, the consumption of 400 kilowatt hours per month would increase from ¢37,200 to ¢47,216.

This increase would affect half a million people in the rural and urban areas of Alajuela, Puntarenas and Limón.

According to the request made on November 20 before the Regulatory Authority for Public Services (ARESEP) of Costa Rica. The increase would be intended to "cover the costs of system operation and to generate resources for its development."

An attempt was made to speak to ICE officials in order to get the official version of how the proceeds from the increase would be invested, but there was no response from ICE spokesman Elbert Duran.

In the petition, the Institute maintains that it intends to apply the new rates beginning on March 1, 2010. Besides the increase in domestic consumption rates, the Institute also requested for preferential customers having a social character to have a rate increase of 30.46% and those who receive medium voltage 24.24% more.

ICE also requested that generation rates (the price at which it sells electricity to municipal companies, private firms and cooperatives) in Costa Rica go up by 14.87%.

If this increase is approved, other energy distributors such as the National Power and Light Company (CNFL) and rural cooperatives could make adjustments in their rates to compensate for the rate increase by ICE.

Finally, ICE requested a 32.3% increase in transmission rates and 26.09% increase for public lighting. ARESEP will assess whether these rate increases will be accepted to be studied.

People in Costa Rica are troubled because ICE is already requesting a rate increase without a real economic recovery from the financial crisis. There are signs of a recovery, but people in Costa Rica have yet to see the recovery in tangible financial terms.

This increase that is being proposed would mostly affect families who are already in precarious socioeconomic conditions. It remains to be seen what ARESEP is going to do about the request for a rate increase