Business sector wants government to declare national emergency over electricity rates

March 20^th, 2013 (InsideCostaRica.com)  The president of the Costa Rican Union of Chambers and Associations of Private Enterprise (UCCAEP), Jaime Molina is calling on the government’s Executive Branch to declare a national emergency due to the rising cost of electricity.

The Union of Chambers convened a lunch yesterday to discuss energy issues, a forum called “The reality of Costa Rican electricity and its impact on the country’s competitiveness.”

Molina criticized ICE’s new rate-setting model, which it calls the “Variable Cost by Fuel” model, which the Regulatory Authority for Public Services (ARESEP) has approved.

This new rate scheme will allow ICE to adjust rates every three months, which worries the business sector because ICE projects its fuel expense for this year to exceed 122 billion colones (about $244 million USD).

The Chamber noted that while its members pay up to $0.16 per kilowatt hour, companies in other countries like Colombia with which they compete are paying $0.10 per kilowatt hour, affecting the country’s competitiveness.

ICE chief executive, Teofilo de la Torre, acknowledged that there have been delays in his company’s renewable energy projects, which has resulted in the company having to increase its consumption of costlier hydrocarbons for electricity generation.

However, the executive said that ICE has recently made better use of Act 7200, which has allowed ICE to purchase 140 megawatts of electricity from private generators, and the company hopes to soon purchase another 70 megawatts to complete the 15% under the Act.

De la Torre added that ICE intends to continue lowering production costs in an attempt to lower electricity rates.  He said that ICE intends to renegotiate its debt, amounting to $500 million, to further reduce costs.