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Increase in price of dollar created financial hole at ICE

Institute says that deficit is accounting and will not affect consumers' pockets

Comptroller, Fitch and Moody's alert due high indebtedness in dollars of the Group

September 19th,2014

The rising price of the dollar had a negative result in the Costa Rican Electricity Institute (ICE) and its subsidiaries, in the first half of the year.

The state company had a net loss of ¢ 133.548 million in the period January to July, according to financial statements. It is the first time in the last five years, in which the entity has such a high deficit.

The ICE attributed the loss, exclusively, the increase in the value of its debt by the appreciation of the dollar. In the first six months of the year, the price of the currency rose by 8.6% compared to December 2013, according to estimates by the institution.

"By quantifying the balance of the debt, the new exchange rate, this difference should be reflected as an expense for the exchange rate, which affects the results," he said, in writing, Jesus Orozco, chief financial officer of ICE.

He added that the adjustment is countable and has no effect on their customers, because the debt is canceled when it expires each of the loans.

In the next four years, however, the business group will have maturities of credit denominated in the greenback, for $ 1.305 billion, according to its financial statements.

Ratings agencies Moody's, Fitch Ratings and the General Accounting Office warned the risk to the ICE for its high exposure to currency fluctuations in recent months. At 30 June before the debt of the company was ¢ 2.2 billion, of which 85% is in foreign currency.

The results of the business group include ICE, National Power and Light Company (CNFL) Radiographic Costarricense (Racsa) and Cable Vision.

The ICE had an increase in their debts, exchange rate of ¢ 144,476,000; CNFL ¢ 8.408 million; Racsa ¢ 1,774,000 and ¢ Cable Vision 72 million. In the final result, these amounts down a bit because revenues are offset by other financial.

Other factors that impacted the outcome of the institution were the expenses for investments mainly by Reventazón Hydroelectric Project, and thermal generation. In the latter case, the Regulatory Authority for Public Services (Aresep) recognized an extra set of ¢ 45,696,000 users in 15 months paid.

Alerts. Giancarlo Rubio, risk analyst at Fitch Ratings, said the high dollar debt exposes the Company to changes in the exchange rate.

"Debt ICE is based on their investments and the exchange rate does affect. But what is most striking is that it does not recognize timely tariff adjustments, "Rubio told La Nacion.

Meanwhile, Moody's explained that, for now, the currency exposure does not involve liquidity risk in the company. Although he warned that if the debt ICE Group up significantly in the coming months, they can deteriorate credit metrics.

The Comptroller said that the Institute shows, since 2010, a decline in profits and warned of the rapid growth of borrowing by the company. Obligations currently represent 47% of the assets of the ICE Group; but in 2010 it was 36%.

Source: 'La Nación'

 

Comptroller report weak control of the grid

September 19th,2014

The Comptroller General of the Republic (CGR) reported weak controls in the National Electrical Distribution System, which can increase prices for service fees.

According to the comptroller, this happens because the companies that provide the service can not control where energy losses are generated in the network.

One criticism is that the Costa Rican Electricity Institute (ICE) and Public Service Company of Heredia (ESPH) do not have the data to identify whether the operation time in each processor in the network is less than or equal to 25, while determining its service life.

In addition, the National Power and Light Company (CNFL) has only the record year of manufacture 2,150 of 27,993 transformers installed on your network.

The Nation called the three operators, but at press time, only spokesmen ESPH got a response to the report of the CGR.

According to Francisco Angulo, spokesman ESPH, this company will clarify the comptroller yes takes a process of linking assets, ie that there exists a localized accounting control transformers. He added that they are looking to improve this point.

Source:

La Nacion

 

 

ARESEP processed increase of 7% in rates by selling electricity to utilities

Increased for ICE subscribers will be 3.7%

September 02nd,2014.

The Regulatory Authority for Public Services (Aresep) is negotiating a 7.11% increase in electricity tariffs that ICE sells to other businesses and cooperatives.

According to the regulator, this setting posed by the Instituto Costarricense de Electricidad (ICE) does not directly impact consumers, for now.

In parallel, the Institute also managed a 3.7% increase for the distribution system that would affect subscribers. Such a request is pending in the regulatory body from the previous July 21 and will be discussed in open court. The change would apply in October.

ICE's petition argues the need to cover costs for energy imports made by the Regional Electricity Market in 2014, amounting to ¢ 31,524,000.

The hearing to discuss two applications of the ICE will be held on September 10 at 5:15 pm at the offices of ARESEP and through videoconferencing in the courts of Carthage, Ciudad Quesada, Heredia, Liberia, Limón, Pérez Zeledon, Puntarenas and; face and form in the Parish Hall of Bribri, located in front of the School Leader Bribrí.

Source: "La Nación"

 

ICE and Recope try to charge users a millionaire error

Authorities will send to ARESEP rate adjustment request before year-end

Refinery sold fuel at lower prices to the Institute during three years

August 21st,2014.

The Costa Rican Petroleum Refinery (Recope) and the Costa Rican Electricity Institute (ICE) try to convey to consumers a million dollar loss that was generated by an error in buying gourmet bunker for thermal plant Garabito.

Majid Brenes, legal director Recope confirmed that both institutions will, before the end of the year, a joint approach to the Regulatory Authority for Public Services (Aresep) to retrieve ¢ 10,000 million.

However, it is not yet decided whether the eventual adjustment will be assembled at the rate of oil or electricity.

"We had meetings to go debugged numbers and reach a joint approach to ARESEP because both institutions are entities with regulated prices", said Brenes.

The Office referred inquiries to ICE, but no answers.

However, the Institute disagrees with pay ¢ 10,000 million Recope until ARESEP not recognize it via rates, argued last May, Luis Pacheco, manager of Electricity. The refinery began at the end of 2013, the administrative fee to ICE.

Basis. Recope imported gourmet bunker, exclusively for ICE, at a lower price between December 2010 and June 2013, the study estimates the losses incurred by the sale of low sulfur bunker ICE. Garabito operates with gourmet by technical recommendation, it has less sulfur than regular.

Since inception, both institutions knew that would generate a loss, but established an agreement in May 2011, for the purchase of the fuel, although tariff-was not recognized.

Under the agreement, ICE agreed to pay the additional cost of imports, relative to the regulated price, but even when ARESEP establish the new cost occurred in July last year.

When Recope tried to make the chargeback, ICE refused to make payment. The argument was that the entity overrun the bunker, which was paid for a period of nearly three years, did not have the backing ARESEP.

Luis Carlos Solera, head of Economic and Financial Studies Recope, said he brought the most expensive bunker in order to ensure the country's power supply.

Indeed, the manager of the ICE said the same argument. ARESEP be the entity that has the last word on the dispute of the two companies once you analyze and resolve application rate adjustment.

Source: 'La Nación'

 

Ticos are fleeing from electrical appliances to spend less

Some escaped the electric stove and who increasingly are showering less

CNFL and ICE  hierarchs say they lowered the average consumption per household

August 17th,2014

Costa Ricans take any measure sleeve saving, efficient or not so much, as long struggle against rises in electricity bills.

The living room and kitchen Ana Castro, 57, are filled with almost as electrical accessory known, but with costs lights one of the few bulbs from the ceiling. Also seems to meditate a few seconds before going to the refrigerator and prevents full use of the kitchen disks.

Castro said his electric bill dropped from ¢ 15,000 to ¢ 8,000, as finally replaced the "very old fashioned fridge." This was the best solution he could think of, said this housewife Pavas.

"The lights never prendo; that TV does not work and that other is just a monitor. compu CPU has no kitchen and there is not turned on. Here we use only the fridge and electric skillet "reviewed.

Marta Cascante, 47, prefers eating out before disbursing amounts "millionaire" to the electric company. Longer cooking tripe, tongue, pork rib or leg because that would imply two or three hours of cooking "too expensive".

He has no idea why pay ¢ 47,000 per month if every old bulb replaced by a more efficient one, never aplancha, and disconnect and connect the plugs and alarm clocks of the four people who live with her in San Francisco de Dos Rios.

To prevent your wages vanish after the arrival of the receipt, Linette Villegas, Pavas, and Argentina Peralta, Osa, they got rid of their electric cookers. Argentina built a small fire, and Linette purchased a gas cooker, even terror that was to take that "dangerous" step.

Others, like Sara González, Ciudad Quesada, no longer see much TV as before and stopped thinking in the shower as a priority. Flora Morera also sancarleña, only used when the temperature is very low, not to mention washing clothes is a luxury.

In this country there are those who, like Gilbert Cubillo, say live happily without receiving a single kilowatt.

"What is going! Here it is with candles. I, while I removed the light. I do not break your head. It was too expensive and I had a fight with people wiring. In itself, the light for me I do not need; well, here's everything electrical and burned, "said the farmer, 55, resident of Pacuarito of Limón.

In early July, the oft-repeated promise of the Government to a short-term reduction in the price of light, ran into near: there will be cheaper receipts for at least 18 months. Her commitment became stable and keep looking for a solution in the meantime.

Read more: 'La Nación'

 
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