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'