Less rain and ICE debts threaten to expensive electricity

IMN provides low in rainfalls; ICE expected startup of new plants

Rates for 2014 do not cover expenditure made in bunker at the end of the year by Institute

January 22nd, 2014.

The risk of less rainfall, coupled with millionaires expenses even without recognizing the Costa Rican Electricity Institute (ICE) thermal generation (diesel and bunker), threaten to raise electricity rates more than expected this year.

For the first and second quarters of 2014, the Regulatory Authority for Public Services (Aresep) approved two hikes (one already in force) which will then be followed by two cuts: one in July and another in October.

However, manufacturers fear that if they fail hydropower forecasts for this season, the shortfall will be covered by burning more oil and bring that inevitably rate hikes.

Last November, the National (IMN) Meteorological Institute made an estimate for the first quarter of 2014, according to which the lack of rainfall recorded during the previous three years in the Caribbean slope is maintained.

Industrial Fear. Carlos Montenegro, deputy executive director of the Chamber of Industries of Costa Rica, warns that if the hydroelectric generation is in deficit, the shortfall will be covered by burning fuels. That, according to his calculations, the annual bill rise about ¢ 55,698,000.

Thus, the Chamber considers that the 2014 could be closed with a payment of ¢ 160,242,000 associated with thermal generation, which sooner or later will move to consumer energy bills.

In 2013, the expenditure amounted to ¢ 120.419 million, according to ICE report, and in 2012 was ¢ 75.099 million (60% less), as ARESEP data.

Montenegro said the model Variable Fuel Cost ICE recognizes any spending without forcing thermal generation to meet criteria for operational efficiency.

In this regard, Duran Elberth ICE spokesman, said yesterday that any prognosis associated with the results of the climate in the country is uncertain. "The same can have an extremely dry summer as the wettest in recent years," he said.

Duran added that this year, the Institute provides for entry into operation of the wind plant Chiripa (Tilarán) with a contribution of 50 megawatts (MW) and hydro Balsa.

Meanwhile, ARESEP confident that any eventuality would also be covered with Tacares plant and increased production of geothermal energy.

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