In a plot twist that would make even the most frugal of Costa Ricans wince, the price of electricity has zapped up by over 8% this month, shocking households and businesses alike with the biggest single jolt since February 2023. The culprit? An insatiable thirst for energy amidst a backdrop of parched hydroelectric dams, courtesy of the ever-unpredictable El Niño.
The Costa Rican Electricity Institute (ICE), the state-owned powerhouse, had seen the storm brewing on the horizon. With the country’s reservoirs looking more like oversized swimming pools minus the fun, ICE had no choice but to fire up the thermal power plants. These energy emergency rooms, powered by pricey imported bunker fuel, are about as cost-effective as air-dropping ice cubes to cool down the sun.
Irene Cañas, ICE’s Electricity Sector’s Executive President, painted a bleak picture, “Our hydro dams are thirstier than a marathon runner in the Sahara, forcing us to rely on our wallet-draining thermal plants.” It seems even the rivers are practicing austerity.
January witnessed an 8.11% surge in electricity prices, outpacing every other expense haunting Costa Rican wallets and company coffers, according to the National Institute of Statistics and Census. The stats read like a horror story for anyone paying a utility bill, with 2023 seeing electricity rates doing the tango between 0.3% to a shocking 15.3% increase across various distribution companies.
This latest price hike isn’t just about the present pain; it’s also settling old scores. ICE’s 2024 budget is still nursing a hangover from 2023’s drought-driven dalliance with diesel generators, earmarking a hefty 94.7 billion colones for this year’s fuel tab.
March through May is looking particularly dire, with Cañas earmarking over 70 billion colones for bunker fuel. It seems like nearly three-quarters of ICE’s fuel funds will be burned in just three months, a period forecasted to be drier than a stand-up comedian’s wit.
As electricity costs spiral, the rest of Costa Rica’s economy is playing it cool, with inflation chilling in negative territory. Yet, economists are peeking over their calculators, predicting that if electricity rates could just take a breather, the inflation rate might tumble down a further 2 percentage points year-over-year.
So, as Costa Rica navigates through this electric storm, households and businesses are battening down the hatches, hoping for rain and dreading the next utility bill. In the meantime, the country learns a hard lesson in energy economics and the unpredictable twists of Mother Nature.
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