The National newspaper La Nacion revealed Friday that the government-owned power company ICE wrote into a 2007 contract with a private hydroelectric firm the clause that it would not buy electricity generated during certain hours of the night.
By preferring its own petroleum powered generation, ICE not only polluted but spent up to five times the cost of electricity generation. The measure cost customers an estimated $20.2 million more.
The situation reached such a point that President Laura Chinchilla was obliged to issue a direct order two weeks ago to the former monopoly to buy electricity at cheaper rates. (ICE still controls distribution of power as well as through its Power and Light subsidiary.)
ICE president Teofilo de la Torre hastened to disavow all knowledge of the contract clause in a La Nacion interview. But he was unable to assure the paper the ICE’s 34 other contracts did not contain similar clauses.
The contract was made amid a crisis in 2007 during which ICE was unable to meet the nation’s power needs, with attendant outages and rationing.
According to Claudio Volio, president of an association of electricity providers, ICE not only ignored protests from the private company about the clause in 2007 but has stubbornly refused to change it since.
It is estimated that ICE has spent $24 million on more expensive electricity since 2007 while the private company has been deprived of the sale of 85.5 million kilowatt/hours of much-needed power.
Commentary: This is yet another example of corporate hubris of the power company. ICE, despite the opening up of private generation of electricity, is still acting like a monopoly, sure that it can pass on any losses to its customers.
With sadness, we at this blog have watched ICE descend from a cherished national icon that brought electricity to all but a tiny number of citizens, into a bureaucratic morass. Sic transit gloria…