In order to remove the main factor causing loss of competitiveness of enterprises, the caps on private generation need to be removed and regulated competition be allowed in the electricity market.
Costa Rican industrialist are demanding substantive measures to achieve lower prices of electricity and fuel, aiming to break down the monopolies held by the Instituto Costarricense de Electricidad (ICE) and the Costa Rican Oil Refinery (RECOPE), and urging the use of energy potential from geothermal sources in the country.
The Government has desisted from continuing with the projects for the opening of the electricity market because of a lack of agreement among stakeholders, unions and interested parties.
Nacion.com reports: "Five plans for an Electricity Law, a archived special committee on energy and an Electrical Contingency Act which has made no progress for one year and five months are evidence of the lack of support for the opening up of the energy market."
Businessmen have made presentations to the Members of the Committee on Economy and Agriculture of the Salvadoran Legislative Assembly, about the need for security and stability for their investments.
Before the commission members, representatives of the generators that operate in El Salvador emphasized security and stability as being crucial in order to continue investing in the country.
In El Salvador, power generating companies believe that the proposed reforms would be detrimental to legal certainty and would discourage investment.
Suggested proposals include changing the pricing scheme for power generation based on production costs, amending it to make it related to the procurement of energy under a free competition system with long-term contracts, and changing the frequency of adjustments in electricity rates.
The new electricity bill proposes the creation of a wholesale electricity market for private companies.
This market, to be supervised by Costa Rica's Public Services Regulator (ARESEP), will be guaranteed 35% of total national electricity demand over the next 10 years.
"The regulator must define the sale of electricity through a pricing scale determined by parameters such as the energy source and cost," comments Nacion.com.
A consortium of rural Costa Rican electricity corporations will present their proposal to reform the Energy Law.
The head of the consortium of electricity cooperatives (Coneléctricas R.L.), Erick Rojas, indicated that the lack of government collaboration has led them to propose the bill.
Potential energy investors are expectant to see what happens with 9 proposed regulation changes.
Carlos Horacio Fernández, president of the Energy Generators Association, stated that many investors are nervous as some of the regulations could affect individual rights regarding hydroelectric investments.
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