Increase in electricity rates approved, a new hike request filed

December 20, 2012

The Regulatory Authority for Public Services (ARESEP) approved on Wednesday increases of 1.44 percent and 3.62 percent in electricity rates to five distribution companies in the country.

The hikes will apply to customers of the National Power and Light Company (CNFL), the Public Services Company of Heredia, and private electricity generators in Guanacaste, Alfaro Ruíz (San José) and San Carlos (Alajuela). The adjustments will apply in coming days when published in the official newspaper La Gaceta.

A family with a monthly average compsumption of 258 kW/h currently pays ₡17,420 ($34.80), and with the approved increase they will pay ₡17,994 ($35.98).

ARESEP explained in a statement that climatic conditions of low rainfall this year caused a reduction in the amount of water stored in the dams of hydroelectric generation, forcing the Costa Rican Electricity Institute (ICE) to increase thermal generation, or production of electricity using fuel.

They also took into account the characteristics of each company as the number of subscribers, the service coverage area and the amount of purchases made from ICE.

Also on Wednesday, the CNFL requested another increase of 9 percent that will be decided before Jan. 19, ARESEP said.

Opposition to increases

The Chamber of Industries of Costa Rica (CICR) on Wednesday unveiled its opposition to the new request, arguing that they are caused by “excessive amount of money the CNFL spends on salary incentives.”

A study carried out by CICR states that there are seven CNFL workers earning more than ₡9 million per month ($18,000), while 500 employees have salaries of ₡2.5 million ($5,000) and almost 2,300 employees have monthly salaries of ₡2 million ($4,000).

As an example, a dam security guard with a monthly base salary of ₡302,000 ($604) receives ₡2,938,000 ($5,876) each month due to wage incentives, the study says.

Carlos Montenegro, CICR’s executive vice director referred to the requests as “excessive” and warned that a 27 percent increase could hit Ticos’ wallets in January, as CNFL has pending hike requests.

The 9 percent increase for thermal generation filed Wednesday would add to another 18 percent increase for ARESEP’s fuel calculation costs methodology, he said.

CICR asked ARESEP to conduct an external human resources audit “to assess the fairness and efficiency criteria of a tariff request that is burdensome and disproportionate to the reality of the country.”

Costa Rican Ombudswoman Ofelia Taitelbaum on Thursday also questioned the CNFL criteria for the increases, claiming “they are excessive and do not meet technical criteria.”

“Requested increases double the projected inflation and have no financial support. They cited exchange rate, which remained almost unchanged throughout the year,” Taitelbaum said.

The ombudswoman requested ARESEP to disclose detailed information on street lighting installation and electrical services costs, in addition to applying technical criteria before approving the increase.

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