Promise to stop increases in electricitry is very difficult to meet

Regulator alleges that neither ICE nor the government nor ARESEP control variables

Adjustment of 3.7% in electricity bills, requested by the Institute, would raise rates in September

August 23rd,2014

Neither ICE nor the government are able to secure the Costa Rican electricity tariffs paid today will be the same until December 2015.

So says the Regulatory Authority of Public Services (Aresep), based on the current methodology for calculating the cost of electricity.

Last July, the Costa Rican Electricity Institute (ICE) and the President, Luis Guillermo Solis promised that the light would not come up in the next 18 months.

They did so by recognizing that the same period also possible for them to get the low expected by users. That way at least they promised stability.

Fulfilled, the average residential customer's monthly ICE- consuming 200 kilowatt hours (kWh) - would disburse 91 ¢ per kWh, a year and a half.

To ARESEP, however, that is a very risky promise.

Why is it not safe? That electricity tariff undergoes two processes: One-the respective bishop corresponds to adjustments requested by the electric generator to cover operating expenses, maintenance, energy purchases from private leases and imports of Regional Electricity Market (MER).

Another, the extraordinary, however, is automatically set each quarter and depends on the variable cost of fuel (CVC).

This varies by how much hydrocarbon is burned in previous months to produce energy and how it is intended to burn.

But these two processes are composed of variables that ICE can not anticipate or control, especially concerning the exact amount and cost of energy imports and the price of fuel will require.

ARESEP warned that neither the regulator nor the ICE nor the government are able to predict weather conditions and international prices (both oil barrel as the regional market kWh) that will be effective over the next year and a half.

What it is in the hands of ICE is to control the negotiation of your debts, expenses and operating costs.

Given these observations, Carlos Obregón, president of ICE, claimed that its technical team adds a lot of experience in probabilistic analysis and determine the condition of next year.

"ARESEP says we say one thing and another (...). There is no 100% guarantee, no, but we believe that we did the calculations are correct and that we keep our promises, "he said.

Read more: 'La Nación'


Price bands prevent ICE buy cheaper energy

Regulatory Authority aims to relax rates to these entrepreneurs

The Institute charges its subscribers three times what it pay per kilowatt

August 11th,2014.

The private power generators vendel ICE might have even lower than current prices, however, prevents methodology.

Therefore, the Regulatory Authority for Public Services (Aresep) aims to relax the price band, above all, on the floor or lower limit.

Making the modification, private could charge less per kilowatt (kWh) that trade with the Instituto Costarricense de Electricidad (ICE). In turn, the Institute should reduce electric rates to subscribers.

According to Aresep intend to seek a new mechanism came after the two contests held on the ICE for power purchase, as all producers offered glued to the floor price established band.

This happened in the call 2012, when ICE issued a tender for 100 megawatts (MWh) of 40 MWh of wind and water. It also became clear on February 4 this year, when he required 40 MWh and 30 MWh of wind hydro.

"Lower the floor is an incentive to lower prices: promoting competition, efficiency and facilitates the entry of more operators," reported ARESEP advisors.

The price band for private power generators are created by a decision of the regulator, May 2011. This order was in force for only plants that were built from that time, not for existing.

To fix the ceiling and the floor took into account factors of profitability, operating costs and investments.

The first band designed, in March 2013, was for water plants. According to this, the value of each kilowatt range between 49 ¢ and 82 ¢.

In September of the same year it was established that the new wind projects (wind) must sell each kWh between 44 ¢ and 65 ¢.

A lack of own band, this year it was defined that the producers of solar energy and biomass should be adapted to the same rules for hydropower. That is, until ARESEP an exclusive design.

Today, ICE generates 74% of the country's electricity; the other 26% comes from non-state generators and cooperatives. The 7200 Act sets a ceiling of 15% for the purchase of private power.

Last year, ICE spent ¢ 59. 417 million in private power, at an average price of 37 ¢ per kWh. With this pocket 1.595 million kWh were generated.

Old plants. Besides opening band for those power projects to be included in the National Electric System (SEN), ARESEP aims to create a band for 28 plants already in operation ..

Last December it was established that the existing private no matter what energy source, with intent are only allowed to sell 37 ¢ per kilowatt.

"A no longer the old plants are recognized operating costs to be depreciated. The band also create for them giving them the opportunity to offer even lower prices and compete with new plants, "the Regulatory Authority.

That ICE retail price (37 ¢ per kWh) is not received by the final consumer.

The fee is charged to the subscriber includes operating costs, transmission and distribution.

Thus, the Institute ends up selling to their customers every kilowatt to nearly triple in 91 ¢.

Read more: 'La Nación'




ICE: 'There will not be electricity increases in 18 months'

August 1st,2014

Following the controversy generated by his latest rate proposal, ICE said that during the next 18 months, do not ask a single increase more expensive electricity bills of their subscribers.

The Instituto Costarricense de Electricidad (ICE) had already made public that promise at the end of June, when he pledged to cut spending and stabilize its finances to lower the cost of light.

That's when the entity itself proposed that the increase of almost 16%, supported by prior ARESEP, were applied in three tracts of 5.32% each, over 18 months.

The ICE and the government joined in the public commitment to maintain stable electricity rates over the next year and a half.

Conflict. Two days ago, the Regulatory Authority for Public Services (Aresep) announced a new application "of rate hike" by ICE. A ARESEP found it "troubling" that ICE broke its commitment to ask for a 3.3% increase in receipts.

In your written request, on July 21, ICE explained that it requires an adjustment must cover (concrete and projected) by increasing energy imports, to which he turned down as long as the burning of fossil fuels.

That explained that this year is expected to import 240 gigawatts, which would imply the disbursement of ¢ 36,212,000. To do this, asked ARESEP recognition of additional income for ¢ 31,524,000.

But Elbert Duran, spokesman for the institute, said yesterday that there was a misunderstanding by ARESEP. He explained that the request was to amend the tariff composition, instead of devoting 3.3% to the purchase of fossil fuels, that percentage is intended for energy imports Regional Electricity Market (MER).

"The price will stay the same from now until December 31, 2015; what changes is the percentage of the items. The stability was a policy set forth by the Government to respect and implement the ICE. No contradiction, "he said.

Carolina Mora, spokesperson ARESEP, no more refer to the ICE proposal because "already entered public hearing process."

Source:'La Nación'



ICE requests increase in electricity

July 30th,2014

The Instituto Costarricense de Electricidad (ICE) filed a request for an increase of 3.3% in electricity tariff, which remains concerned about the ARESEP, it is not consistent with the policy outlined by the government, in terms of maintaining stability in electricity rates over the next 18 months.

However, the ICE justifies its request on the need to cover the costs of electricity imports, which was necessary due to weather conditions that caused a longer summer and less amount of rainfall recorded historically.

This option, import the regional energy market is preferable to produce thermal energy plants in the country. Only for the month of May, the country avoided about $ 7 million in additional use of fossil fuels.

Under the law, the Regulatory Authority shall submit to the public discussion of the proposal at a public hearing ICE.

The last time I went to the ICE ARESEP for a rate increase, it was rejected after failing with technical information required for the study.

Source: ARESEP Web Site


Increase until 16% in electricity will be made in three times

June 28th,2014.

The increase in electricity rates scheduled for next month will now apply three times, spread over 18 months.

Thus, subscribers of the Instituto Costarricense de Electricidad (ICE) will see in your next bill up 5.32%, up from 15.5% initially considered.

Thus, a family of 200 kilowatt hours (kWh) per month paid ¢ 17,400, ¢ 18,351 must pay. Been applied, increase that spoke first, that amount would have been of ¢ 20,184.

The decision to delay the adjustment took Regulatory Authority of Public Services (Aresep) at the request of ICE. For customers of National Power and Light Company (CNFL), the increase will be 4.33% instead of 14.55%, while subscribers of the Management Board of Carthage Utility (Jasec) increase were 2.71% and 15.14% no.

Users of the Public Service Company of Heredia (ESPH) will pay 2.14% more for electricity, instead of 12.01%.

"This measure will 'flatten' rate during this period and well distributed in time additional charges arising from thermal generation, which has occurred due to the decrease in the amount of rain," he added ARESEP.

Thus, the average adjustment amounts of 1.60% and 9.66% no.

During these 18 months, it is expected that other provisions that have been considered by the Government and ICE for lower rates materialize.

Such measures include rationalization of operating costs, the use of the Regional Electricity Market (MER) and the entry into operation of the plant Reventazón in Pococí.

Source:La Nacion

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