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Costa Rica

( Last update: July 2006 )

Electricity Market
Sector structure
Upstream The sector is partially privatised.

Costa Rica is highly reliant on hydro schemes which represent approx. the 82% of the installed capacity in 2005 which are mainly publicly-owned.

The Instituto Costarricense de Electricidad (ICE), which consists of a selection of state companies of electricity and telecommunication sector, is the dominant player accounting for the 81.1% of installed capacity (i.c.) in 2005. The remaining of production is generated by some distributors - municipal utilities and rural cooperatives, representing the 6,9% of i.c. - and a few IPPs under sale contracts with ICE (12% of i.c.).

More in deep, ICE-ENERGY and ICE-TELECOMMUNICATIONS companies, as well as the subsidiaries Compañía Nacional de Fuerza y Luz (CNFL) and Radiográfica Costarricense Sociedad Anónima (RACSA), form ICE-Group.

The Centro de Contro de Energia (CDCE), a division of the ICE, is the market operator (MO).
Networks Transmission and distribution are publicly owned.

ICE operates the national transmission grid (so called “Sistema National Interconectado – SNI”).

The SNI is interconnected with Central America pemitting energy exchange from Panama to Honduras. Even though there is an energy exchange, the lack of capacity in the other of the Central American countries doesn't allow an active electrical market.

A postage-stamp method is adopted for transmission tariffs regulated by the Regulatory Authority for Public Services, the energy regulator (so called “Autoridad Reguladora de los servicios publicos” - ARESEP).

Distribution handled by ICE and its subsidiary Compañía Nacional de Fuerza y Luz S.A. (72% of market), 2 municipal utilities and 4 rural cooperatives.
Downstream The sector is publicly owned.

Distributors are exclusive suppliers under their respective areas except for ICE allowed to supply electricity all around the country.

End-user tariffs are regulated.
Gas Market
Sector structure No production or consumption of natural gas.
However the US-based Mallon resources owns an exploration concession in northeastern onshore Costa Rica.
Current issues

2000 government proposal to privatise ICE and allow IPPs to sell generation directly to eligible customers encountered strong public opposition and was eventually abandoned.

The regional grid "Sistema de Interconexión Eléctrica para los Países de América Central" has been planned.
National Legislation Law No. 7200 (1990) and Law No. 7508 (1995, reforming Law 7200, in Spanish only)
Electricity legislation available here.
Sources IERN processing on publicly available information