Plan proposes to pay to municipalities for housing electric plants

ICE, Chamber of Industry and Acope object canon since electricity rate will rise

July 2nd,2015

Municipalities receive money per kilowatt hour (kWh) generated power projects operating in their canton, if a bill is being discussed in the Legislative Assembly approves.

The initiative seeks to 19,119 local governments perceive a penny per kWh sold, no matter what source is generated. That is, it would apply to hydroelectric, wind, geothermal and biomass, both state and private projects.

Was the deputy Jorge Rodriguez, the Social Christian Unity Party (PUSC), who presented the text to be discussed in the Committee on Economic Affairs of the Congress Party.

His purpose, he said, is to "justice" and compensate all cantons suffering economic and social damage for hosting these works.

The document, in the legislative process since May 2014 provides that the fee would be collected by the Ministry of Finance and would be used for the repair and maintenance of roads and infrastructure, as well as social and environmental preservation programs.

"The law would not be retroactive and would not apply to small producers of solar energy (distributed generation). There are doubts about whether a penny or one colon will be charged, "said Congressman rojiazul.

Rodriguez, former mayor of Paraíso de Cartago, insisted that the municipalities themselves are capable of running the resources flowing into its coffers. Weeks ago, however, the Comptroller General of the Republic revealed severe underutilisation of funds by local governments.

How do you receive? The main concern of the sectors is that the new tax encarecería even more electricity rates paid by consumers.

This was confirmed by Dennis Melendez, chief of the Regulatory Authority for Public Services (Aresep). He said if the generation is taxed, the payments would be "unmanageable" for producers and the impact on prices would be "significant".

In 2014, they would have raised with canon ¢ 50,000 million, which surpasses all the expenditure for operating and maintaining the system of generation of the Costa Rican Electricity Institute (ICE).

According contributions of Luis Pacheco, manager of the Institute, the source that would provide more money to the municipalities would be hydroelectric, because its plants 66% of electricity (6.717 billion kWh) generated.

The second would be heavier geothermal, which produces 15.2% (1.538 billion kWh). Followed by thermal, responsible for 10% (1.043 billion kWh) and wind, with 7% (735 million kWh).

Carlos Obregon, president of ICE, said that electricity production (in the case of the entity) has no profit, so all the money generated need for investment.

Mario Alvarado, director of the Costa Rican Association of Power Producers (ACOP), rejected the plan. It argues that the private sector pays the taxes that domestic firms canceled.

"The rates of electricity service, as a public service are established under the principle of the service cost. Taxes would be an additional cost and will move no doubt to the end user, "Alvarado said.

The initiative also convinces Gilberto Monge, Mayor of Mora and vice president of the National Association of Mayors and Municipalities (NHAI). He rescues "the spirit" of the plan, but believes that the money that they would turn very little and not worth creating conflict between sectors. He added that the municipalities did not propose the text and they were not consulted.

Obregon, Alvarado and Enrique Egloff Monge, president of the Chamber of Industry, oppose further load electricity rates because rather, the country has been seeking desperate measures by lowering them and improving employment and competitiveness

Read more: 'La Nación'