Delays in the construction of the large hydropower projects and increases in their costs are making the future level of electricity tariffs unpredictable.
Monday, November 12, 2012
Elfinancierocr.com reports that "The Association of Major Power Consumers (Acograce) and the Chamber of Industries (CIRC) believe it is time for the Costa Rican Electricity Institute (ICE) to improve and streamline their internal processes, which because of their slowness and bureaucracy, is costing the country many millions. "
The lack of estimates by the Instituto Costarricense de Electricidad (ICE) and the Autoridad Reguladora de los Servicios Públicos (Aresep) of electricity prices, has caused concern among entrepreneurs, representatives of the major energy consumers.
"Ronald Jimenez, president of Acograce, said the price of the projects should not be unlimited. Carlos Montenegro, the CIRC's deputy executive director, considers the projects to be strategic, but warned that only competition in electricity generation will ensure that plants contribute cheap kilowatts. "
The increase in costs of the hydroelectric plants under construction, and the resulting increase in the rates for the electricity produced, "has put the business sector on alert, and they are warning of a loss of competitiveness compared to other countries where the industry has lower rates".
Industrialists are starting to look at transferring their plants to countries where energy costs are lower.
The high cost of electricity bills has caused some industries to look at moving their operations out of the country in the search for savings and competitiveness.
Corporación Yanber, a manufacturer of packaging for trade, industry and agriculture, decided to go to Nicaragua eight months ago, and other companies are evaluating the possibility of moving their operations to countries where the energy sector impinges less on the cost of their products.
Overwhelmed by the growing impact of energy costs, large electricity consumers in Costa Rica are asking for a reduction in their electricity rates of between 10.7% and 38.6%.
From a press release by the Regulatory Authority for Public Services (Aresep):
The Costa Rican Association of Large Energy Consumers (ACOGRACE) has requested a rebate for electricity rates in the business sector.
Business associations say the country needs a comprehensive law that allows greater participation and competitiveness of private generators.
The Costa Rican Union of Chambers and Associations of Private Business Sector (UCCAEP) predicts sharp increases in electricity rates, and points to inefficiency in the management of the Instituto Costarricense de Electricidad (ICE), as the monopoly responsible for satisfying the country's demand for electricity.
On the increas since 2007, the current cost per kilowatt in Costa Rica is $0.13, 113% more than in the U.S. and 30% more than in Colombia and Mexico.
The high cost of electricity reduces competitiveness for Costa Rican producers, and according to the conclusions of a competitiveness forum organized by Deloitte and Amcham, there is no prospect that the situation will change in the short term.
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