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'