San José, Costa Rica, since 1956
Cost of living

Costa Rica's industry sector leaders fed up with high electricity rates

The Costa Rican Chamber of Industries (CICR) on Thursday blasted a new 3.7 percent increase in electricity rates requested by the Costa Rican Electricity Institute (ICE). Chamber leaders urged the Public Services Regulatory Authority (ARESEP) to reject the request, noting that ICE in July promised to cut spending and stabilize its finances in order to prevent electricity rate hikes for the next year and a half.

CICR Vice President Ricardo Solera said chamber members are concerned about the number of companies that recently have closed operations in the country. Many of those companies have publicly said that electricity rates are the main factor affecting the country’s competitiveness. Solera added that from January 2013 to July 2014 the country’s industrial sector has eliminated 6,366 jobs.

“It is imperative for ARESEP to carefully analyze the magnitude of recent electricity rate increases and the consequences of the drop in competitiveness. … Electricity has a direct impact on production,” Solera stated in a press release.

ICE Executive President Carlos Obregón in July downplayed the effect the proposed hikes would have on customers.

Solera, however, accused ICE of lacking transparency in its request to ARESEP. He said the request contained only partial information regarding the agency’s revenue, expenses and sales forecasts. He noted that ICE rates have increased by 20 percent this year.

“The industrial sector is deeply concerned, as we are responsible for 23 percent of the country’s gross domestic product, 16 percent of private-sector employment and 75 percent of exports. Yet we consume only 24 percent of the electricity available within the national power grid,” CICR stated.

Contact L. Arias at larias@ticotimes.net

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Norman Warren

How can ICE increase the price of electricity when the price of oil is down 20% over the last 6 months. No way this increase can be justified!. The only was to fix the problem is to allow competition within this sector. As a monopoly, ICE can do what they want. Look what happened with ICE and the cell phone business. They got competitive both in pricing and service real quick.

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Jennifer Long

ICE is horrible. Here’s the real acronym: In Case of Emergency (don’t call us). Everything about the company is horrible. Everything about their service is horrible. They drive around in nice, new, shiny trucks so they have money for that, but always cry wolf for an increase in electricity fees, have the WORST cellular and internet service EVER. In short, ICE SUCKS OUT LOUD!

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donskipton

Join the solution, install solar panels. Keep it simple with a grid tie system and it will pay off in less than 5 years , which is the same as getting a 20% return on your investment. And it keeps on working for at least 30 more years. CR-Solar.com Don

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Bobpiazza

Reviewing my recent electric bill, the kw/hr price is 18.6 cents (546 exchange rate)
An increase of 3.7% would bring the cost up to 19.3 cents per kw/hr (546 exchange rate)
Prior to moving to Costa Rica I lived in Alaska and worked at designing, constructing and maintaining electrical transmission and distribution lines for over 20 years.
Costa Rica is not unique with harsh weather, difficult terrain and earthquakes.
The average 2014 cost for kw/hr in Alaska is 20.13 cents. That includes the larger urban areas and the very remotest possible villages. In some of the areas the material costs exceed 5 times that of Costa Rica, and in all areas the labor costs ranges from 200 to 500 percent of that in Costa Rica.
Although Alaska is very large (30 times bigger in area than Costa Rica), there are less than 1 million people living there. That is about 1/3 the population of Costa Rica
In other terms, for every square mile of service area in Alaska, there are on average of 2 consumers.
For every square mile of service area in Costa Rica there are on average of 152 consumers.
Only one state in the US has a higher cost than Alaska. That is Hawaii (a group of islands over 2,500 miles from the mainland) at 38.66 cents per kw/hr.
The average cost of electricity in the US, including the 2 highest (Alaska and Hawaii) is 12.97 cents per kw/hr.
The average costs of electricity for Mexico are 10 cents per kw/hr.
When I first moved to Costa Rica years ago I was told that electricity was inexpensive. My first bill informed me that was not true. There are many who pay less than 10.000 colones a month. But most likely they cook with wood, do not have television and very few lights and no hot water.
I live in the hills above Santa Barbara de Heredia. I do not have heating or air conditioning. I cook with gas and my hot was is gas. My average bill throughout the year is about 100 US dollars.
Every time the wind blows or there is an electrical storm my power is out. Average time out is about 8 hours. Once it was for 2 days. In the electrical trade we would call my circuit an overtime maker.
When you compare
• the weather, terrain, earth quake exposure,
• material costs per average consumer,
• labor costs per average consumer, and
• generation costs
Costa Rica appears to be terribly mismanaged and not concerned about the consequential effects to the consumer.
Not only should the Costa Rican Chamber of Industries be outraged, but all consumers in Costa Rica. Prior to rate increases, shouldn’t ICE be held accountable for cleaning up their act?

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SDPUS

Absolutely excellent information Bob. Thanks for providing your professional input. Costa Rica is a country of institutionalized corruption. Life doesn’t function here on a daily basis without corruption. They have shot themselves in the foot. The question is: who will stop the bleeding? Without putting corrupt big business people and politicians in prison, things will never change. That is true for everywhere in the world. Corruption is a total killer! And the results of decades of corruption here, are now coming to fruition. President Solis, lock them up, or your Presidential career will be a failure. No doubt about it! Your prisons are way overcrowded already, but none of the real criminals are in there.

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SirVivor

It would be interesting to know all the particulars of why Costa Rica’s electricity rates are so unusually high. Is hydroelectric not an effective way to go?

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