In a move that could jolt household budgets, Costa Rica’s electricity costs are gearing up for a significant hike, with potential increases ranging from 5.14% to a staggering 17.13% starting January 1, 2024. This surge in prices, as proposed by the Regulatory Authority of Public Services (ARESEP), might just be the spark that lights up the conversations around energy consumption and sustainability in the country.
The High Cost of Keeping the Lights On
At the heart of this price hike is the Variable Generation Cost (CVG) – a term that might soon become as familiar to Ticos as their morning cup of coffee. This cost, essentially the financial burden of producing thermal energy and purchasing fuel, has been an albatross around the neck of the Costa Rican Electricity Institute (ICE).
Rain Check: Hydroelectricity Takes a Hit
The fluctuations in reservoir levels and hydroelectric production, primarily attributed to the whims of El Niño, have forced ICE to find alternative – and pricier – means to keep the nation powered. This includes resorting to the Regional Electricity Market (MER) to import energy, thus incurring additional expenses.
The Billion-Colón Question
According to ARESEP’s technical teams, the reimbursement amount ICE needs to cover its 2023 expenses (including thermal generation and imports) clocks in at a hefty ¢86,132.9 million. This figure covers costs incurred from May to October of the same year.
A Gradual Shock to the System
The proposed price adjustment is designed to allow ICE to recoup 50% of its 2023 expenses in 2024. Furthermore, it factors in the estimated expenses for 2024, pegged at a dizzying ¢99,481.51 million. As for 2025, it will see the charging of the remaining 50% from 2023 and additional funds required to combat the persistent El Niño phenomenon.
Public Consultation: A Jolt of Democracy
This electrifying proposal is currently in the throes of public consultation. ARESEP is inviting the populace to voice their opinions on this matter – a democratic process that might generate as much heat as the electricity it concerns.
Forecasting a Stormy Scenario
The document sent to Energy Superintendent Mario Mora Quirós, which underlines the need for this increase, paints a picture of a challenging year ahead for the National Electric System (SEN). It underscores the considerable expenses incurred in thermal generation and energy imports, with a projection of continued high expenditure in 2024.
The Countdown to Decision Day
The Energy Superintendent’s office now faces a decision that could send shockwaves across the nation. By December 15, they will have to decide whether to greenlight this recommendation, setting the stage for a year where every flick of the switch could mean a little more.
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