Ricardo Trujillo: electricity tariffs at reasonable cost

The ICE is required to meet demand regardless of the cost of the fare

June 02nd,2015

It is really inconceivable and even depressing to read the positions of both the Costa Rican Electricity Institute (ICE) and the Minister of Energy at the possibility that the Board of opposition in the Legislative Assembly revived the electric bill on contingency.

His refusal to accept that the country is experiencing an emergency in the field of high electricity tariffs is pathetic and insulting to the thousands of unemployed resulting from the closure of companies, caused first by the impact of high electricity tariffs; then by the economic slowdown they triggered such closures; and, finally, by the inaction of the current government to this social tragedy.

Electricity has become the most expensive among them have energy. The energy content of a liter of regular gasoline is 10 kilowatt hours and costs ¢ 600 today, including the 30% tax.

This means that the unit cost of a kilowatt-hour is 60 ¢. While the same kilowatt-hours of energy delivered by the ICE in their service areas varies between 84 ¢ and 150 ¢, excluding the 13% tax.

It is therefore not mere coincidence that the vast majority of food businesses in the country have migrated to propane for cooking.

Who still cooks with wood, as in the nineteenth century, enjoys a much higher savings, although it contributes negatively to the country's deforestation.

Lower costs. The current legal obligation ICE is meet demand regardless of the cost of the fare, so it is very easy for them to justify the high level they have reached their tariffs, which define as "reasonable" term that implies for them a little or no concern to reduce what they pay subscribers.

When ICE was founded, the legal obligation that was given was producing at cost, which at that time was understood as the minimum cost, since the rate would be deprived of a lucrative profit.

That electricity cost was for Costa Rica, for decades, a great competitive advantage over our closest neighbors and trading partners, but we lost several years and finally ended negatively impacting the entire social fabric.

Currently, ICE is required by a presidential directive of the Chinchilla administration to buy electricity produced by private generators at the lowest cost market, but unfortunately there is a legal ceiling of 15% tax for 25 years in the 7200 Act, which higher purchases which prevents private producer of that at minimum cost.

Raise production ceilings to the private sector and make the presidential directive into law of the Republic are now the only legal resources to help the Costa Rican Electricity Institute to continue purchasing and delivering low-cost power.

(*) Former President of the AIEEE

Source: 'La Nación'