More on Electrical Rates

Analysis: In a July 2 article on electrical rates in Costa Rica, this reporter was taken to task by a reader who was able to refute my statement that this country "has the highest electrical rates in Central America." (See comments on that story.)

Journalists tend to want to simplify things for their readers--but the truth is always more complicated than it seems and this reporter regrets having fallen into the trap.

First, this reporter blamed the business publication El Financiero for the quote. In reality, they were merely quoting no lesser light than President Laura Chinchilla who made the statement this spring in San Francisco, California, on her tour through the United States.

We do not know, unfortunately, the context of her statement. It seems a rather strange thing to say when the most important facet of her trip was to entice foreign industry to this country.

But, in truth and in fact, as U.S. lawyers love to say, rates vary according to customer. In Costa Rica residential rates are relatively low because business picks up the higher bill. Apparently La Nacion writer Gerardo Fumero ran into the same controversy while analyzing the cost of electricity to residences in the May 25 edition.

He did not touch on industrial and business rates in his original article and received some flak for that. Here are his figures, pyblished later, on industrial rates:

In terms of U.S. cents per KWH, Cenral American countries charge industry: Honduras--12.46, El Salvador--14.86, Costa Rica--15,87, Panama--18.46, Nicaragua--20.61 and Guatemala--22.07, placing this country essentially in the middle.

But, in terms of industries with the highest consumption such as Intel, Costa Rica indeed is the cheapest in the region with 9.85 U.S. cents per kilowatt/hour, followed by Honduras--13.71, Panama--14.10, El Salvador--14.86, Nicaragua--16.91 and Guatemala--20.50.

Fumero quotes in a recent article his 2006 book El Estado Solidario Frente a la Globalizacion, about the reality of Intel's special treatment in order for the government to land this powerful industry:

"In the case of Intel, the company managed to negotiate a series of privileges that its national counterparts and citizens don't enjoy...at the moment of its arrival the government extended to it a preferential rate in electrical service (of) U.S. $0.05/kw despite the actual cost of electricity being $0.069, representing an annual subsidy of $3.8 million."

One can easily see that Fumero is a careful researcher and reporter. But he, too, has a point of view and ends his rebuttal to his critics by proposing that President Chinchilla support the suggestion of the CNFL power company that special rates be given to the very poor, a proposal that the public utilities regulating agency ARESEP turned down flatly.

As for this reporter, he firmly rejects the charge of having written a "biased article" while expressing his gratitude to his critic for helping set the record straight. But I will not unsay anything I have written about the bureaucracy and inefficiency of ICE.

But I do have a point of view: Any monopoly, whether public or private, breeds a kind of hubris that must be watched constantly.