in the entirety of the text - Full Text of Regulation 05 Favorable opinion on the "Promotion of electric charging infrastructure and strategies for sustainable mobility" COMMISSION TO PROMOTE COMPETITION COPROCOM OPINION No. 05-2025 COMMISSION TO PROMOTE COMPETITION, AT THIRTEEN HOURS AND TWO MINUTES ON THE THIRTIETH OF APRIL, TWO THOUSAND TWENTY-FIVE.
I. BACKGROUND
On April 4, 2025, this administrative body received, via electronic mail, official letter AL-CCS-142-2025, dated April 4, 2025, by which independent deputy Cynthia Córdoba Serrano of the Special Permanent Environmental Commission referred a consultation to the Commission to Promote Competition (hereinafter, "COPROCOM"), requesting its opinion on the Draft Bill, Legislative File No. 24.171 "PROMOTION OF ELECTRIC CHARGING INFRASTRUCTURE AND STRATEGIES FOR SUSTAINABLE MOBILITY," which was attached. In this regard, no deadline was granted in the official letter to evacuate the respective consultation.
II. ON THE POWER OF COPROCOM TO ISSUE OPINIONS AND RECOMMENDATIONS
In accordance with the provisions of numeral 3, subsection h), in relation to number 21, both of the Law for the Strengthening of Competition Authorities of Costa Rica (hereinafter, Law No. 9736), COPROCOM has the power to issue opinions and recommendations on matters of competition and free concurrence, regarding laws, regulations, agreements, circulars, and other administrative acts and resolutions, whether in force or in the process of adoption, it being understood that the opinion issued shall not have binding effects.
In this sense, the aforementioned Article 21 of Law No. 9736 provides, for the purposes of our interest here, the following:
"ARTICLE 21- Issuance of opinions and recommendations The Superior Body of each competition authority may issue opinions and recommendations on matters of competition and free concurrence, ex officio or at the request of the Executive Branch, the Legislative Assembly, other public entities, or any administered party, on the enactment, modification, or repeal of laws, regulations, agreements, circulars, and other administrative acts and resolutions, whether in force or in the process of adoption. Likewise, it may issue opinions on bid specifications or administrative contracting notices, whose elements may obstruct the principle of competition and free concurrence. The opinions issued by each competition authority shall not have binding effects.
Those public entities that depart from these opinions regarding the enactment, modification, or repeal of regulations, agreements, circulars, and other administrative acts and resolutions, whether in force or in the process of adoption, shall be obliged to inform the corresponding competition authority of their reasons, within a period not exceeding thirty calendar days. Such report must be signed by the hierarchical superior of the public entity issuing it. (...)". (Emphasis added).
This power falls within the scope of Competition Promotion and Advocacy1, that is, advocating for competition through the issuance of opinions and guides, conducting market studies, and advisory, training, and dissemination activities, with the purpose of fostering and driving improvements in the process of competition and free concurrence in the market; eliminating and preventing distortions or entry barriers, as well as increasing public knowledge and awareness of the benefits of competition.
1 Competition advocacy is understood as those activities carried out by the competition authority relating to the promotion of a competitive environment for economic activities, through mechanisms other than law enforcement, mainly through its relations with other governmental entities and increasing public awareness of the benefits of competition. RICE. (2002). Advocacy and competition policy. Report prepared by the Working Group on Advocacy. ICN Conference, Naples, Italy.
It is worth noting that the aforementioned non-binding effect in this matter is not a particular condition of national legislation but rather a general application of Competition Law2, which is observed in different comparative international regulations.
2 "(...) Competition Law (known in the United States as Antitrust Law) is the branch of law responsible for regulating commerce by prohibiting illegal restrictions, price-fixing, and monopolies. It seeks to promote competition among existing companies in a market and foster the quality of goods and services at the lowest possible price, guaranteeing an efficient market structure. 'Antitrust' has its origin in United States Law. The name is due to the fact that this branch of law was created to combat trade trusts. Subsequently, other countries adopted the Antitrust concept in their legal systems using other terms such as 'competition laws,' 'free competition,' or 'antimonopoly laws.' The objective of Competition Law is to promote 'fair competition' among companies. It has had an important effect on business practices and the restructuring of the industrial sector in the countries where it has been adopted. Based on the premise that free trade benefits consumers, businesses, and the economy in general, the law prohibits different types of trade restrictions and the abuse of monopolization. (...). Regulatory norms against anti-monopolistic practices date back to 1890, with the Sherman Act in the United States of America, which requires the federal government to investigate and prosecute any act or contract that tends to generate monopolistic conduct. (...)." (Voto 070-2015, Administrative Litigation Court, Fourth Section, San José, at eight hours on the thirteenth of July, two thousand fifteen).
It is thus a matter of exercising a power, whereby COPROCOM decides whether or not to issue an opinion; that is, it is not obliged to opine in all cases, only when it deems it pertinent and to the extent and depth it considers appropriate, in accordance with its technical competencies, and evidently, from the perspective and viewpoint of the Competition Law that concerns it.
III. ON THE MOTIVATION AND CONTENT OF THE DRAFT BILL IN QUESTION
A. THE MOTIVATION OF THE DRAFT BILL The proposed Draft Bill is based (in summary) on the following considerations and motivations:
a. The vehicle fleet is key to reducing greenhouse gas emissions, improving air quality, and fulfilling international environmental commitments.
b. An existing obstacle to the adoption of electric vehicles is the lack of charging infrastructure.
c. The objective of the Draft Bill is to promote the expansion of the national electric charging network to support the transition to electric transportation.
d. Among the motivations, they narrate the rapid growth in the sale of electric vehicles worldwide.
e. Imports of electric vehicles have increased in recent years, according to data from the Ministry of Environment and Energy (MINAE); as of December 2023, there is an accumulated total of 12,302 electric vehicles in the country³, with an increase of 87% between 2022 and 2023 alone. This number not only includes automobiles (8,963) but also motorcycles (1,243), special vehicles (1,714), and work vehicles (382).
³ Ministry of Environment and Energy. (s.f.). Electric vehicles in Costa Rica. Retrieved on January 29, 2024, from https://energia.minae.go.cr/?p=5634 f. Regarding the state of the electric charging center network, as of October 2023, approximately 290 fast and semi-fast charging points were registered in the ELECTROMAPS4 database in Costa Rica. According to the Ministry of Environment and Energy (MINAE) registry, the country has 48 fast chargers, most owned by the Costa Rican Institute of Electricity (ICE)5; however, the Decarbonization Plan set a target of 69 operational fast-charging centers for 2022. According to a recent survey by the Costa Rican Association of Electric Mobility (ASOMOVE), in which 650 people from across the country participated6, more fast-charging points are required.
4 Electromaps. (s.f.). List of charging points for electric vehicles in Costa Rica. Retrieved on January 29, 2024, from https://www.electromaps.com/es/puntos-carga/costa-rica 5 Ministry of Environment and Energy. (s.f.). National charging infrastructure. Retrieved on January 29, 2024, from https://energia.minae.go.cr/?p=4100 6 Costa Rican Association of Electric Mobility. (2024). National Fast Charging Network Survey. Retrieved on January 30, 2024, from https://asomove.org/encuesta-red-nacional-carga-rapida?fbclid=IwAR3Y_nFvnQAFNTbe0m9hkIkN_h1Mh17i9vHcj00jRuMPBhfp9MGFjKm8xEU g. With respect to the regulatory framework, the motivation of the Draft Bill argues that the Law on Incentives and Promotion for Electric Transportation (Law No. 9518 of 2018) limits the implementation of charging centers to electricity distribution companies. These companies can establish alliances with fuel sales stations or owners of other public, private, or mixed establishments; however, this resource has been little used. Similarly, the sale of electricity is limited to distribution companies; however, it is more a charging service than a sale of energy, a service which includes adequate lighting and security; even at these electric charging points, other activities and services can be offered to users.
h. Finally, the aforementioned motivation indicates that private sector participation would stimulate the improvement of the electric charging service.
IV. ON THE DRAFT BILL
A. Proposed Reforms in the Draft Bill Below, a competition assessment of the substitute text of the Draft Bill under study is carried out, contrasting the current regulatory framework with the proposed law reform:
| Current Regulatory Framework | Proposal | Assessment |
|---|
| ARTICLE 31- Implementation of charging centers. The construction and commissioning of charging centers in the country is the responsibility of the electricity distribution companies. The Ministry of Environment and Energy (MINAE) shall have the obligation to ensure the construction and operation of the charging centers, as defined by this law. <br><br>In accordance with international standards, on national highways, at least one charging center must be built and commissioned every eighty kilometers (80 km); on cantonal roads, at least one charging center must be built and commissioned every one hundred twenty kilometers (120 km). The indicated distances may be adjusted by the Ministry of Environment and Energy, via regulation. <br><br>The charging centers must have an information board regarding the nearest or next charging points, charging times, consumption statistics, and other information defined by MINAE, via regulation. | ARTICLE 31- Authorization for the installation of charging centers. All natural or legal persons, public or private, are authorized to install, develop, and operate electric vehicle charging centers, as well as the sale of the general interest service of electric vehicle charging. The Ministry of Environment and Energy (MINAE) shall issue the corresponding regulation for the construction and operation of the infrastructure and the charging centers. <br><br>The owner of a charging center must guarantee the reliability and safety of their equipment and assume all responsibility directly associated with the service they offer, as well as for any damages they may eventually cause, both to their clients and to the electrical network of the electricity distribution company. <br><br>There will be a basic network of charging centers to ensure nationwide coverage; the construction and commissioning of this basic network of charging centers shall be the responsibility of the electricity distribution companies. <br><br>The Ministry of Environment and Energy (MINAE) shall have the obligation to ensure the construction of said network, via regulation. The Regulatory Authority of Public Services (ARESEP) must supervise this basic network of charging centers, as defined by this law. On national highways, this basic network of charging centers must have at least one charging center built and commissioned every eighty kilometers (80 km); on cantonal roads, at least one charging center must be built and commissioned every one hundred twenty kilometers (120 km). The indicated distances and quantities of charging centers may be adjusted by MINAE, via regulation. | 1. General authorization for natural and legal persons. <br><br>The new regulation empowers the opening of the market for electric vehicle charging centers to any natural or legal person, without distinction of their prior status as an electricity distributor, which is considered favorable and in accordance with the promotion of competition and free concurrence. <br><br>2. Minimum charging distances. <br><br>The establishment of minimum charging distances and number of stations could discourage investment or operation by a greater national supply of charging stations and facilitate anticompetitive distributions of geographic markets; therefore, it is recommended that their inclusion in the articles of the proposed Law be reconsidered. <br><br>Likewise, it is warned that the imposition of mandatory minimum distances and number of stations could incentivize artificial market segmentation, facilitating tacit or collusive agreements between operators, especially on high-demand routes. Instead of rigid mandates, more flexible regulatory mechanisms could be considered, such as indicative goals or economic incentives targeted at underserved geographic areas, which would allow preserving coverage objectives without restricting free entry and competition among suppliers78. <br><br>7 In 2017, the Federal Economic Competition Commission of Mexico (COFECE) challenged a reform to the Human Settlements and Urban Development Law of the state that imposed minimum distances of up to 1,500 meters between fuel service stations. The Commission considered that this measure violated the principles of free concurrence and competition established in the Constitution of the United Mexican States. https://sil.gobernacion.gob.mx/Archivos/Documentos/2017/05/asun_3537741_20170503_1493820684.pdf <br><br>8 COFECE has also identified that local regulations establishing minimum distances between tortilla shops can limit competition by restricting the entry of new participants into the market. These restrictions can lead to higher prices and lower quality in the products offered to consumers. In a statement issued in 2010, COFECE recommended eliminating these regulatory barriers to foster more vigorous competition in the production and distribution of tortillas, for the benefit of consumers. https://www.cofece.mx/wp-content/uploads/2018/10/cfc06-2010.pdf <br><br>3. Elimination of information boards. <br><br>The information boards regarding nearby charging points and the additional information they were intended to contain are eliminated. It is suggested that such information continue to be accessible to consumers, provided that information of public domain is disseminated and not commercial variables that could facilitate the materialization of anticompetitive practices. <br><br>In place of the physical boards eliminated in the new text, it is recommended to establish an obligation for the availability of information through interoperable digital platforms, with public and neutral access, that report on the location, availability, and basic characteristics of the charging centers. This digital approach is not only more in line with current technological trends but also allows for more dynamic access and avoids potential information barriers or exclusionary practices by operators with dominant positions. |
| Current Regulatory Framework | Proposal | Assessment |
|---|
| ARTICLE 32- Sale of electricity at charging centers. Only distribution companies that hold their respective public service concession may sell electricity at charging centers, in accordance with Law No. 7593, Regulating Law of Public Services, of August 9, 1996. The Regulatory Authority of Public Services (ARESEP) shall define the sale tariff at charging centers. <br><br>Distribution companies that hold their respective public service concession are authorized to sell electricity, to install charging centers in alliance, association, co-investment, or other type of business structure, with fuel sales stations or related service stations. | ARTICLE 32- Commercialization of the charging service. The commercialization of the electric vehicle charging service is considered a general interest service, as defined in Article 2 of the Law for the Promotion and Regulation of Energy Resources, Law No. 10086 of December 8, 2021, and its amendments. <br><br>ARESEP must establish specific obligations for this general interest service, which include aspects such as: <br><br>a) Universal access: Ensuring that all persons, regardless of their location or economic situation, have access to the services. <br><br>b) Fair prices: Preventing abusive pricing practices in a competition context. <br><br>c) Minimum quality: Establishing quality standards that providers must meet. <br><br>d) Sustainability: Guaranteeing that the services are sustainable from a social, economic, and environmental point of view. <br><br>ARESEP shall define the tariffs associated with the public service of distribution and commercialization of electrical energy charged by electricity distribution companies to the natural or legal persons operating charging centers, being profitable for the electricity distribution companies and allowing a fair compensation margin for the owners of charging centers. <br><br>ARESEP must supervise the charging centers, for which it shall define a levy of zero point zero five percent (0.05%) of the final price of each charging service marketed in each charging center; said levy shall be calculated at the close of the fiscal year. The purpose of this levy shall be to provide the necessary resources for efficient supervision of the operation of charging centers. Annually, ARESEP must account for the use of these resources through an audited report. | 1. Declaration as a general interest service and specific obligations. <br><br>It is recommended to define within the Draft Bill what should be understood by general interest services applied to the case of electric vehicle charging stations, with the objective of not imposing burdens or regulations pertaining to other industries on economically active agents, current or potential, in the electric vehicle charging market. Regarding the imposition of "Fair Prices," it is recommended to liberalize said prices, in consideration of the provisions of Article 5 of the Law for the Promotion of Competition and Effective Defense of the Consumer (Law No. 7472). <br><br>Likewise, the use of indeterminate terms such as "fair prices" or "fair compensation" should be avoided, given that their ambiguity can lead to discretionary regulatory interventions that discourage investment or limit the entry of new competitors. In line with Article 5 of Law No. 7472, price freedom should be privileged in all links of the value chain that do not have monopolistic characteristics, reserving tariff regulation only for those activities that require it for technical or objective reasons, such as access to distribution networks. <br><br>In that sense, it is suggested that the legal definition of general interest service for the case of electric charging stations be clear and limited, precisely establishing the public objectives that justify such treatment, such as universal coverage, environmental sustainability, or security of supply. This will help avoid the imposition of obligations unrelated to the specific business of this activity or the extrapolation of regulatory burdens from other energy sectors. <br><br>2. Tariff regulation for electricity distributors. <br><br>Given the nature of a natural monopoly, commonly linked with electricity distribution systems, it is considered desirable to apply an efficient regulation scheme for the sector; however, for the purposes of the present Draft Bill, it is recommended to reconsider the inclusion of the terms "profitable" and "fair compensation" for others that directly refer to the incentive of free trade in the sector, to the extent that the industry's value chain allows it. |
V. CONCLUSIONS
From the foregoing, it is concluded that the Draft Bill is favorable in competition matters, as it empowers the entry of any natural or legal person into the electric vehicle charging industry.
However, the following possible areas for improvement are noted, in accordance with best practices in matters of Competition and Free Concurrence in markets:
- 1)The establishment of minimum distances and number of charging centers could discourage the investment or operation of economic agents offering services in the industry, as well as facilitate an artificial segmentation of the market, enabling tacit or collusive agreements between operators, especially on high-demand routes, thus limiting competition. Therefore, it is recommended to reconsider its implementation, with the objective of promoting a higher total supply of electric vehicle charging stations at the national level.
- 2)Maintaining the information boards regarding nearby or close charging points, and the additional public information they were intended to contain, is an effective mechanism for promoting competition among agents. Therefore, it is suggested that such information continue to be accessible to consumers.
- 3)It is recommended to include, within the Draft Bill, the definition of "general interest service," for the particular case of electric vehicle charging stations, with the objective of not imposing burdens or regulations pertaining to other industries on the future companies operating in this market.
- 4)Regarding the use of the terms "profitable" and "fair prices," it is recommended to evaluate the possibility of the electric vehicle charging service operating under a scheme of free price setting, and that competition and a plurality of offers by different operators in the market be promoted, to the extent that the structural conditions of each stage of the industry's value chain so allow.
VI. RECOMMENDATION
For the foregoing reasons, a favorable opinion is issued regarding the Draft Bill of Legislative File No. 24.171, under the terms and conditions expressed in this Opinion, insofar as it intends to promote the opening and plurality of offers in the electric vehicle charging service in the national territory.
Having said the above, the Legislative Assembly is recommended to:
? Evaluate and address the observations in point V, Conclusions, of this document, in order to resolve the difficulties and eventual practical situations that could be contrary to competition and the management of this Body. Especially regarding: 1) Normative definition of minimum distances and number of charging stations, 2) Promotion of information boards with public data, 3) Delimitation of the definition of "general interest service," and 4) Evaluate the possibility of free price setting.