Tuesday 15 June 2021

Lower Rainfall This Year Could Mean Higher Electricity Rates

A hot dry summer in Costa Rica could lead to higher electricity bills.
A hot dry summer in Costa Rica could lead to higher electricity bills.

A combination of less rainfall, coupled with the increased cost of generating electricity using bunker and diesel fuels, threaten a sharp rise in electricity rates this year.

The Autoridad Reguladora de los Servicios Públicos (Aresep) – regulating authority for public services – has already approved two hikes for the first and second quarter of 2014 (the first already in force), followed by two cuts, one expected in July and the other in December.

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However, with the forecast of less rainfall for this year will cause a shortfall in hydro generation that has to be covered by the use of fossil fuels. Burning more oil means more costs for the state power company, which inevitably means a hike in rates.

Last November, the Instituto Meteorológico Nacional (IMN) – Costa Rica’s weather service – said we can expect a deficit of rainfall in the first quarter of 2014, levels lower that those of the past three years.

Lower rainfall could see ICE expenditures go to a forecast ¢160 billion colones this year. According to the ICE report submitted to the Aresep, in 2013 it spent ¢120 billion colones, up from the ¢75 billion paid out in 2012, for thermal energy generation.

In this regard, Elberth Durán, spokesperson for ICE, said on Tuesday that any prognosis associated with the results of the climate is uncertain. “As we can have an extremely dry summer, we have the wettest in recent years as well”, said Durán.

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According to Durán, ICE is counting on the start of operations of the Chiripa (Tilarán) wind farm with a capacity production of 50 megawatts and the Balsa hydro electric project with a 40 megawatt capacity.

Threatening higher electricity rates are the inclusion (by the regulating authority) of ICE’s expenditures of ¢12.6 billion colones made for thermal generation for November and December last year. The Aresep also included an adjustment of ¢4.9 billion in additional spending on oil made between August and October 2013.

Last year, Costa Rica consumed 1,196 gigawatts of thermal energy, accounting for 13% of all electricity produced during the year.

For 2014, ICE plans to generate 714 GV with hydrocarbons, at a cost of ¢64.7 billion colones, which is paid through rates approved by the Aresep.

Source: La Nacion

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We strive for accuracy in its reports. But if you see something that doesn’t look right, send us an email. The Q reviews and updates its content regularly to ensure it’s accuracy.

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