Costa Rica's Legislative Assembly is sitting on a bill that would eliminate caps on electricity production by regional producers, a move President Oscar Arias' administration hopes will help the country's power supply keep pace with growing demand.

The bill would reform the Law of the Participation of Electrification Cooperatives and Municipal Public Service Businesses, in effect since 2003. Under that law, regional cooperatives can only account for 15% of the total capacity of the nation's electricity production infrastructure.

Four regional cooperatives – Coopesantos, Coopeguanacaste, Coopealfaro Ruiz and Coopelesca – would benefit from the reform, as would the Heredia Public Services Company (ESPH), a public utility in the province of Heredia, north of San José, and the Electric Services Administrative Board of Cartago (JASEC), a utility in the province of Cartago, east of the capital.

In 2007, these producers together generated 7.34% of the 8,889 Gigawatt-hours produced nationwide, according to Elbert Durán, a spokesman for the Costa Rican Electricity Institute (ICE).

All other electricity production comes from the ICE, the state-owned electricity and telecom firm with a monopoly over both fields, and its subsidiary, the National Power and Light Company (CNFL).

The Arias administration presented the bill to the Legislative Assembly April 17.

In 2008, ICE is expected to spend $220 million on diesel and bunker fuel to run thermal power plants to make up for what isn't produced by the nation's mostly hydro-power electricity infrastructure, the daily La Nación reported.

This follows the nationwide blackout that surprised Costa Ricans last April, and the programmed power outages that followed. A lack of rainfall left the reservoirs that feed the mostly hydropower infrastructure too low to produce the needed power, forcing the country to depend on outdated thermal plants. When two of those went down, there was not enough power to go around.

Critics said ICE restrictions, such as the caps on regional production, have kept the nation's power infrastructure from expanding fast enough to keep pace with the growing demand, which is between 5% and 6% per year.