Resolución 002 — Tariff band for new private hydroelectric generators

in the entirety of the text - Full Text of Norm 002 Partially Revokes resolution 796-RCR-2012 "Tariff band for new private hydroelectric generators that use water as an input to generate hydroelectric energy for sale to the Instituto Costarricense de Electricidad" Full Text of record: ECC8E PUBLIC SERVICES REGULATORY AUTHORITY RESOLUTION RJD-002-2013 San José, at ten o'clock on the eighteenth of February of two thousand thirteen APPEALS FILED BY THE ASOCIACIÓN COSTARRICENSE DE PRODUCTORES DE ENERGÍA (ACOPE); COMPAÑÍA HIDROELÉCTRICA DOÑA JULIA S.R.L; HIDROELÉCTRICA CAÑO GRANDE S.A.; EL EMBALSE S.A. AND HIDRO CANALETE S.A., AGAINST RESOLUTION 796-RCR-2012, ISSUED BY THE REGULATORY COMMITTEE.

I.That on March 16, 2012, through resolution 796-RCR-2012, the Regulatory Committee resolved, -among other things-, to set the tariff band for all new private hydroelectric generators that use water as an input to generate electric energy for sale to the Instituto Costarricense de Electricidad under Chapter I of Ley 7200 and its amendments, composed of a lower tariff (lower limit) of $0.0798, an average tariff of $0.1080 and an upper tariff (upper limit) of $0.1363 per kWh. (Folios 855 to 957).

II.That on May 9, 2012, the Asociación Costarricense de Productores de Energía (hereinafter ACOPE), the Compañía Hidroeléctrica Doña Julia S.R.L (hereinafter Doña Julia), the company Hidroeléctrica Caño Grande S.A. (hereinafter Caño Grande) and the company El Embalse S.A. (hereinafter El Embalse), dissatisfied with what was resolved, filed motions for reconsideration (recursos de revocatoria) with subsidiary appeal against resolution 796-RCR-2012. (Folios 824 to 830, 831 to 840, 841 to 847 and 848 to 854 respectively).

III.That on May 17, 2012, the company Hidro Canalete S.A. (hereinafter Canalete), dissatisfied with what was resolved, filed a motion for reconsideration (recurso de revocatoria) with subsidiary appeal against resolution 796-RCR-2012. (Folios 958 to 963 and 1142 to 1148).

IV.That on September 14, 2012, through resolutions 937-RCR-2012, (folios 1503 to 1537) 938-RCR-2012 (folios 1538 to 1570), 939-RCR-2012 (folios 1573 to 1605), 940- RCR-2012 (folios 1606 to 1637), 941-RCR-2012 (folios 1638 to 1669), the Regulatory Committee resolved to reject on the merits the motions for reconsideration filed by ACOPE, Canalete, Caño Grande, El Embalse and Doña Julia respectively, all against resolution 796-RCR-2012. Likewise, in the cited resolutions, the aforementioned appeal was elevated to the knowledge of the Board of Directors and the parties were summoned before the Board of Directors to assert their rights within a period of three business days.

V.That on September 28, 2012, ACOPE responded to the summons given (folios 1467 to 1469). It is not evident in the record that the companies Canalete, Caño Grande, El Embalse and Doña Julia responded to the summons.

VI.That on October 1, 2012, the then Energy Services Directorate (DEN), through official communication 1077-DEN-2012, in accordance with the provisions of article 349 of the LGAP, referred for the knowledge of the Board of Directors the appeals filed by ACOPE, Canalete, Caño Grande, El Embalse and Doña Julia, against resolution 796-RCR-2012. (Folio 1670).

VII.That on October 5, 2012, the Secretariat of the Board of Directors of ARESEP, through memorandum 532-SJD-2012, referred for analysis by the General Directorate of Legal and Regulatory Advisory the appeals filed by ACOPE, Canalete, Caño Grande, El Embalse and Doña Julia, against resolution 796-RCR-2012. (Folios 1671).

VIII.That on December 21, 2012, the General Directorate of Legal and Regulatory Advisory, through official communication 948-DGJR-2012, issued its opinion on the appeals filed by ACOPE; Doña Julia; Caño Grande; El Embalse and Canalete against resolution 796-RCR-2011.

IX.That through official communication 15-DGDR-2013, dated February 13, 2013, the General Directorate of the Center for Regulatory Development issued its opinion regarding the specific price indices most suitable for updating the investment cost of new private electricity generation plants.

X. That the useful and necessary proceedings for the issuance of this resolution have been carried out

I.That on June 7, 2012, through Agreement 07 of ordinary session number 44-2012 of the Board of Directors held, and published in Supplement 85 to La Gaceta 125 of June 28, 2012, the final paragraph of Transitional Provisions II and III of the Internal Regulations for the Organization and Functions of the Autoridad Reguladora de los Servicios Públicos and its deconcentrated bodies (RIOF) was modified; whereby the mandate of the Regulatory Committee was extended until December 31, 2012.

II.That on January 1, 2013, the Energy Intendancy (IE) came into operation, which, in accordance with article 45.1.f and o of the RIOF, is responsible for setting, in an ordinary and extraordinary manner, upon request of a party and ex officio, the prices and tariffs for regulated services, authorizing the charge for environmental services when applicable, as well as resolving the motions for reconsideration (recursos de revocatoria) filed against the acts issued.

I.That from official communications 948-DGJR-2012 and 15-DGCDR-2013 cited above, which serve as support for this resolution, the following is extracted:

II. ANALYSIS AS TO FORM

1. APPEAL FILED BY ACOPE i) NATURE OF THE APPEAL The appeal filed is the ordinary appeal, to which the provisions of articles 343, 345 and 346 of the LGAP are applicable.

In accordance with article 346.1 of the LGAP, the cited appeal must be filed within a period of three business days counted from the communication of the administrative act in question, a period that expired on May 9, 2012. By reason of the foregoing, it is held that the appeal was filed within the period granted by law.

2. APPEAL FILED BY CANALETE i) NATURE OF THE APPEAL The appeal filed is the ordinary appeal, to which the provisions of articles 343, 345 and 346 of the LGAP are applicable.

3. APPEAL FILED BY CAÑO GRANDE i) NATURE OF THE APPEAL The appeal filed is the ordinary appeal, to which the provisions of articles 343, 345 and 346 of the LGAP are applicable.

4. APPEAL FILED BY EL EMBALSE i) NATURE OF THE APPEAL The appeal filed is the ordinary appeal, to which the provisions of articles 343, 345 and 346 of the LGAP are applicable.

5. APPEAL FILED BY DOÑA JULIA i) NATURE OF THE APPEAL The appeal filed is the ordinary appeal, to which the provisions of articles 343, 345 and 346 of the LGAP are applicable.

Although a notarial certification of legal capacity exists (folio 329), the appointment had expired as of the date the appeal was filed. (.)

IV. ANALYSIS ON THE MERITS

Before making the respective assessments regarding the merits of the matter, it should be clarified that even though it has been determined that the appeal filed by Canalete was filed extemporaneously and in the appeal filed by Doña Julia the legal representation of Mr. Ronald Álvarez Campos was not accredited, because they present arguments similar to the appeals filed by the other appellants, we proceed to carry out the analysis of the arguments set forth, considering that the Board of Directors, as the hierarchical superior, has, among others, the power to adopt the necessary measures to adjust the conduct of the subordinate to the law and good administration, revoking it, annulling it or reforming it ex officio, in accordance with the provisions of articles 102 and 174 of the aforementioned law.

Regarding the common argument of dissatisfaction of the appellants, we indicate the following:

The appellant companies allege that the index used to update investment costs is not appropriate, has not been defined in any methodological resolution of ARESEP, nor has it been previously used to set tariffs for hydroelectric plants.

Specifically, they allege that in the case of the setting defined in the appealed resolution (796-RCR-2012), the source of the appropriate United States Producer Price Index (IPPEEUU) for this type of adjustments was the one indicated in resolution 750-RCR- 2012, through which tariffs were set for existing private generators that use water as an input to generate electric energy for sale to ICE under Chapter I of Ley 7200 (ET-153-2011). In said resolution, the industrial producer index identified under series WPU0543 from the Bureau of Labor Statistics was used, which is included within the group of fuels and related products and energy. It indicates that using that index, a variation of 9.7% (January 2010 - January 2012) is obtained. It should be clarified that in view of the data provided in the appeals, it is evident that to obtain that percentage, the preliminary data for January 2012 (204.3) was used, the definitive value for that date being 201.1, from which a variation of 7.8% is obtained for the same period.

Additionally, they argue that there are other appropriate indices for updating investment costs in electric plants. One of them is the so-called Bureau of Reclamation Construction Cost Trends (the Composite trend version). According to the appellants, for the same adjustment period (between January 2010 and January 2012) the variation obtained is 9.3%, a value similar to the Bureau of Labor Statistics index indicated above and which reflects the normal behavior of that variation and a symmetry between both indices.

In this regard, it should be noted that resolution RJD-152-2011, which established the "Reference tariff methodology for new private hydroelectric generation plants," applied in the appealed tariff setting, does not specify how the unit investment amount or investment cost is updated; it only indicates that this value will be updated in each tariff setting. Thus, the referenced resolution leaves the manner of carrying out that update to the discretion of the technical area, once it has the investment cost data.

The Regulatory Committee, in resolution 796-RCR-2012, updated the investment cost by using the industrial producer price index for electric power generation (PCU221110221110), reasoning that this was consistent with the provisions of resolution RJD-163-2011 "Model for Determining Reference Tariffs for New Private Wind Generation Plants." The calculation performed in this way resulted in an adjustment in the investment cost of new plants, between January 2010 and January 2012, of -11.35% for the data taken from the "Plan Indicativo Regional de Expansión de la Generación. Período 2011-2025. Diciembre 2010", (GTPIR) and of -11.03% for the projects from the tariff settings carried out by ARESEP during 2011 (annual variation of 2011 versus the January 2012 figure). It should be clarified that these variations were calculated with the preliminary data for January 2012 and the annual figure for 2011.

The index mentioned in the previous paragraph (as indicated on the Bureau of Labor Statistics website http://www.bls.gov/ppi/ppipower.htm), measures price changes for the initial transaction received by power generation establishments. This industry consists of facilities that convert other forms of energy, such as: water energy, fossil fuels, nuclear energy and solar energy into electric energy for sale to transmission and distribution systems of that energy.

As for the index that the appellants consider should have been applied, in this case - Resolution 750-RCR-2012- WPU0543, it measures price changes for fuels and related products and energy for the industrial electric energy sector. (As indicated on the Bureau of Labor Statistics website http://data.bls.gov/timeseries/WPU0543?data tool=XGtable) Among the elements contained in this index are: coal: bituminous and anthracite, gaseous fuels: natural gas and liquefied petroleum gas, electric current: industrial power with a demand of 500 kW and commercial power with a demand of 40 kW, crude petroleum, refined petroleum products: gasoline, kerosene and jet fuel, light fuel oils, residual fuels. (According to the Producer Price Index by stage of processing Bureau of Labor Statistics, indicated on the website http://www.sba.muohio.edu/noblenr/DRI/ppi.pdf.)

The other index proposed by the appellants, Bureau of Reclamation Construction Cost trends (as indicated on the website of the U.S. Department of the Interior, Bureau of Reclamation http://www.usbr.gov/pmts/estimate/cost_trend.html ), measures changes in construction costs, providing a quick means to determine the current construction cost of various infrastructures based on previous estimates. Records exist from 1984 to date. Among the construction indices included are: earth dams, concrete dams, diversion dams, pumping plants, power plants: structures, equipment and improvements, steel pipelines, concrete pipelines, canals, tunnels, lateral drains, distribution pipelines, switchyard and substations, wooden electric transmission poles, steel towers and transmission lines, primary roads, secondary roads, bridges, land property.

As can be observed, the PCU221110221110 index -used in the appealed resolution- measures variations in energy sales prices, and the WPU0543 index - proposed by the appellants and used in resolution 750-RCR-2012- measures price variations of various fuels, energy and power, so neither of the foregoing is directly related to construction costs or prices of civil works or electric generation plants, which is what is ultimately intended to be recognized in the tariff through the unit investment amount.

Among the construction indices is the aforementioned Bureau of Reclamation Construction Cost trends, which contemplates variations in the construction costs of hydroelectric plant infrastructures, therefore this advisory body considers that this is consistent with the purpose pursued in the methodology regarding investment cost.

By virtue of the foregoing, it is evident that the appellant companies are correct in that the index used in the appealed resolution to update investment costs is not the most appropriate.

On the other hand, from the review of the calculations performed and included in the file, carried out by this advisory body, it is evident that the data used to calculate the standard deviation in order to establish the tariff band differ from those used to determine the average investment costs, which ultimately leads to an erroneous result for the tariff limits defined in the appealed resolution. It is clear that to give consistency to the tariff, the referred error must be corrected using the same data to calculate the average investment costs and the standard deviation.

2. Regarding the legal basis for the requirement of audited financial information.

Regarding the argument of common dissatisfaction in the appeals filed by ACOPE and Canalete, we indicate the following:

Regarding the questioning of the legal basis for requesting audited financial information, the appellant companies are informed that the competence to request such information by the Autoridad Reguladora derives fundamentally from Ley 7593. According to this Law, regulatory authority is exercised over regulated services and the providers of these services. In this area, ARESEP must ensure compliance with the legal, technical and good management standards applicable to regulated public services.

Particularly in order of oversight, article 6 subsection a) provides that said oversight will be accounting, financial and technical, which will be exercised over public service providers (understanding as such, the regulated entity) to verify the correct handling of the factors that affect the cost of the service. This would allow it to oversee the investments made, the indebtedness incurred, among other elements.

On the other hand, as correctly indicated by the Regulatory Committee in resolutions 937-RCR- 2012 (folios 1503 to 1537) and 938-RCR-2012 (folios 1538 to 1570), in accordance with article 14 subsections a), c) and d) in concordance with article 24, all of Ley 7593, the obligations of public service providers to comply with the provisions issued by the Autoridad Reguladora and to timely provide the information requested in relation to the public service they provide are derived.

It is necessary to point out that Ley 7593 meets the requirement of article 24 of the Political Constitution, since the need to grant powers to the Autoridad Reguladora to review private documents is justified when the public interest so requires. (Regarding this, see Voto de la Sala Constitucional 2002-01485 of 2:50 p.m. on February 13, 2002).

Now, in accordance with the "Procedure for processing requests for confidentiality declarations of documents and information made by private providers of public services regulated by the Autoridad Reguladora", published in La Gaceta No. 166 of August 25, 2004, in concordance with article 273 and concordant articles of the LGAP, the appellant companies may petition the Autoridad Reguladora that the documents and information submitted be declared confidential and thus prevent the parties to the proceeding in question or third parties from having access to those documents and information. The act declaring the confidentiality of a document or information must be fully reasoned and substantiate the reasons justifying the restriction on access to the documents and information declared confidential, the foregoing in accordance with article 274 of the LGAP. (Regarding this, see Voto de la Sala Constitucional 2002-07337 of 3:28 p.m. on July 24, 2002).

In view of the fact that Decreto Ejecutivo No. 32565 -including its article 23- was repealed in its entirety at the time the appeal was filed, in accordance with the provisions of article 348 of the LGAP, we proceed to interpret that the dissatisfaction of the appellants is for the violation of article 40 of Decreto Ejecutivo No. 37045 and not article 23 of the repealed regulation.

Regarding the argument, it should be indicated to the appellant that article 40 of Decreto Ejecutivo No. 37045 refers to the figure of "Positive Silence" (Silencio Positivo), from which it follows that the petition is deemed favorably resolved if the Administration does not issue a ruling within the regulated period. Generically, in our legal system, positive silence is contemplated in article 330.1 of the LGAP, in cases of requests for permits, licenses and authorizations.

Permits, licenses, approvals and authorizations allude to what doctrine calls administrative acts with declarative effects, that is, situations where the subject's right pre-exists and is only conditioned on its exercise.

Case law has clarified that positive silence does not proceed in administrative acts with constitutive effects, that is, those referring to situations where the subject's right is born with the administrative act. (TCA, Section 1, resolution 386-2011, TCA, Section 2, resolution 254-2000 and Sala Constitucional, votes 2954-94, 3174-94, 820-95, 2000-1137, 2001-9599).

As tariff and price-setting acts -in accordance with previously determined methodologies- are acts with constitutive effects, since the operator's right is born at the moment a tariff is set, the application of article 40 of Decreto Ejecutivo No. 37045 would not be applicable, as it refers, as indicated, to positive silence.

Notwithstanding the foregoing, it is considered advisable for the Board of Directors of the Board of Directors to request the General Directorate of the Center for Regulatory Development to submit, as soon as possible, the proposed methodology for incorporating the environmental factor into the tariffs in question for its consideration.

By virtue of the foregoing, this advisory body considers that the appellant is not correct regarding this argument.

Ley 7593 transformed the Servicio Nacional de Electricidad into an autonomous institution called the Autoridad Reguladora de los Servicios Públicos (ARESEP), with legal personality and its own assets, as well as technical and administrative autonomy, whose primary objective is to exercise regulation over the public services established in article 5 of said Law.

That article continues by stating that it will be subject to the National Development Plan, the corresponding sectoral plans, and the sectoral policies issued by the Executive Branch.

In this way, the Autoridad Reguladora is the competent entity to set tariffs and prices in accordance with the methodologies that it itself determines and to ensure compliance with the standards of quality, quantity, reliability, continuity, timeliness and optimal provision of the public services listed in article 5 of Ley 7593, among which is the supply of electric energy in the stages of generation, transmission, distribution and commercialization (article 5 subsection a) of Ley 7593).

To set tariffs and establish the respective methodologies, the Autoridad Reguladora de los Servicios Públicos has exclusive and excluding powers. This has been stated by the Procuraduría General de la República, in opinion C-329-2002, ruling 005-2008 from 9:15 a.m. on April 15, 2008, of the Tribunal Contencioso Administrativo, Sixth Section, as well as ruling 577 from 10:20 a.m. on August 10, 2007, of the Sala Primera de la Corte Suprema de Justicia, among others.

Although, in principle, as indicated, this Regulatory Authority has the power to set any tariff methodology it considers best applies to each public service, the same must respect the principle of service at cost as well as the rules of science and technique, as provided in articles 1, 3, 4, 5, 9, 24, 25, 31, 32 and 45 of Ley 7593 and 16 of the LGAP, as was done with the approval of the methodology in question.

The approved methodology leads to the setting of a tariff band; the prices at which energy is contracted can be any within those limits. Those tariffs within those limits are authorized by the Autoridad Reguladora. It does not follow from this that the Autoridad Reguladora has delegated its power to set tariffs.

In this regard, the First Chamber (Sala Primera), through judgment 506-F-S1-2010 of April 30, 2010, in Considerando III stated: "Thus, for this Collegiate Body, the defendant, without exceeding its powers in resolution RRG-9233-2008, whose annulment is sought in the proceeding, created a band system for determining the price of fuels in ports and airports for large consumers. In accordance with the stipulations of numeral 31 ibid., the ARESEP may enable or create price calculation models for regulated services, being able to take into account variables external to the providers," such as inflation, exchange rates, interest rates, hydrocarbon prices, salary fixing carried out by the Executive Branch (Poder Ejecutivo) and any other variable that the Regulatory Authority (Autoridad Reguladora) considers pertinent" (emphasis supplied). Thus, in the present case, the defendant did not delegate its competence to RECOPE, but rather established the formula that it technically deemed most adequate and suitable to regulate the specific market, in which it took the variation of the international price of hydrocarbons, within the bands that the model established. Consequently, the only thing that the Refiner does is apply it and obtain the price that it must publish daily on the Internet, but it is the ARESEP that continues determining the tariff for that market, through the established methodology. Therefore, a delegation of its competence regarding price fixing does not occur, but rather it exercised the discretion it possesses in the matter, taking into account the variables in said market." The First Chamber (Sala Primera) clearly recognizes that the ARESEP does not exceed its powers when setting a tariff based on a tariff band system and that it is not delegating functions that are its own.

Additionally, the appellant must consider that through resolution RJD-161-2011, of October 26, 2011, published in La Gaceta No. 230 of November 30, 2011, the Board of Directors (Junta Directiva) of ARESEP resolved, among others: "II. To add to the text of the title 'Adjustment of the tariff band values (Ajuste de los valores de la banda tarifaria)', in point I of the operative part (parte dispositiva) of resolution RJD-152-2011 the following text: 'At no time may the prices paid for the purchase of electric energy be greater than the upper limit of the current tariff band (banda tarifaria), nor less than the lower limit of that band.'" This being the case, it is clear who defines the tariffs and the manner of applying them, and therefore the appellant is not correct in its argument.

c)On the amortization period of the credit.

Regarding the matter referring to the definition of the debt term, where it is established that it will be 20 years without there being a real criterion of the debt terms to which private hydroelectric plants are subject, it is worth noting that within the financing conditions, the debt amortization period was defined at 20 years, to equate it with the maximum term of the contract that the law allows. The methodology applied by the Regulatory Committee (Comité de Regulación) to set the tariffs defined in the resolution appealed here, fixes a tariff band (banda tarifaria) for the industry, not individual tariffs, and it opens sufficient space not to exclude any particular financing conditions that a generator may have.

By virtue of the foregoing, the appellant is not correct in this argument.

V. CONCLUSIONS

Based on the above, the following conclusions can be reached:

1. From a formal standpoint, the appeals (recursos) filed by the companies ACOPE, Caño Grande, and El Embalse against resolution 796-RCR-2012 are admissible since they were filed in a timely manner and in proper form.

2. From a formal standpoint, the appeal (recurso) filed by the company Canalete is inadmissible, for lack of standing (legitimación).

3. From a formal standpoint, the appeal (recurso) filed by Doña Julia is inadmissible, for lack of proper representation.

4. The index PCU221110221110—used in the appealed resolution—and the index WPU0543—proposed by the appellants—are not related to construction costs or prices of civil works or electricity generation plants.

5. Among the construction indices, there is the Bureau of Reclamation Construction Cost Trends, which contemplates variations in the construction costs of hydroelectric plant infrastructure and is considered consistent with the purpose pursued in the methodology regarding the investment cost.

6. The data used to calculate the standard deviation (desviación estándar) for the purpose of establishing the tariff band (banda tarifaria) differ from those used to determine the average of the investment costs, which ultimately leads to an erroneous result for the tariff limits defined in the appealed resolution.

7. In accordance with articles 6.a and 14 subsections a), c) and d) in conjunction with article 24, all of the Ley 7593, the obligations of public service providers to comply with the provisions issued by the Regulatory Authority (Autoridad Reguladora) and to timely supply the information requested in relation to the public service rendered are derived.

8. Tariff and price-setting acts—in accordance with previously determined methodologies—are acts with constitutive effects (efectos constitutivos), and therefore the application of article 40 of the Decreto Ejecutivo No. 37045 would not be appropriate.

9. The approved methodology entails the setting of a tariff band (banda tarifaria); the prices at which energy is contracted may be any value within those limits. The tariffs within those limits are authorized by the Regulatory Authority (Autoridad Reguladora). It does not follow from this that the Regulatory Authority (Autoridad Reguladora) has delegated its power to set tariffs.

10. Within the financing conditions, the debt amortization period was defined at 20 years, to equate it with the maximum term of the contract that the law allows, and it is not linked to a particular company.

(.)" Official Communication 15-DGRD-2013 (.)

5. Analysis There are different technical alternatives regarding the specific price index to use to update the investment cost of new hydroelectric plants. Unlike other cases, the current "Reference Tariff Methodology for New Private Hydroelectric Generation Plants (Metodología Tarifaria de Referencia para Plantas de Generación Privada Hidroeléctricas Nuevas)" does not establish the specific index to be used, but it does indicate that the investment cost must be updated periodically.

In general, the most representative index for the assets whose cost is to be updated must be chosen. The relative desirability of an index may be related to variables such as the geographical distance of the area in which it was calculated relative to the country using it, the currency used, the length of the available historical series, the periodicity of the figures, the timeliness with which the data is updated, the stability of the source, its public nature, the credibility of the issuer, the specificity of the index, etc.

In the case of private electricity generation plants, it is the criterion of this General Directorate (Dirección General) that the single most important factor is the specificity of the index, as this reflects the evolution of prices of the specialized fixed assets that make up the investment projects.

In this sense, it should be noted that the DGDR shares the criterion issued by the DGJR (official communication 948-DGJR-2012), when it states, in relation to two alternative indices published by the Bureau of Labor Statistics of the United States of America, that ".4. The index PCU221110221110—used in the appealed resolution—and the index WPU0543—proposed by the appellants—are not related to construction costs or prices of civil works or electricity generation plants," and when it indicates that ".5. Among the construction indices, there is the Bureau of Reclamation Construction Cost Trends, which contemplates variations in the construction costs of hydroelectric plant infrastructure and is considered consistent with the purpose pursued in the methodology regarding the investment cost." Given that private generation plants are highly specialized goods, if a price index can be identified and used that captures price variation information for the particular fixed assets they require, this constitutes a more representative option than other indices of a more general nature.

6. Conclusion The DGDR considers that, of the options identified, the construction cost index of the Bureau of Reclamation Construction Cost Trends is the most representative and adequate for updating the cost of the fixed assets of private hydroelectric plants.

II.Based on the findings of fact (resultandos) and findings of law (considerandos) preceding and in accordance with the merit of the proceedings, the appropriate course of action is: 1.- To reject on procedural grounds the appeals (recursos de apelación) filed by Hidro Canalete S.A. and Compañía Hidroeléctrica Doña Julia S.R.L, against resolution 796-RCR-2012 for lack of standing (legitimación) and for lack of proper representation respectively; 2.- To partially grant the appeals (recursos de apelación) filed by the Asociación Costarricense de Productores de Energía (ACOPE), El Embalse S.A. and Hidroeléctrica Caño Grande S.A. against resolution 796-RCR-2012, solely regarding argument 1, concerning the use of the index PCU221110221110 for updating the investment cost; 3.- By reason of the foregoing, to partially revoke resolution 796-RCR-2012 of March 16, 2012, solely regarding the use of the index PCU221110221110 for updating the investment cost and regarding the data used to calculate the standard deviation (desviación estándar) for the purpose of establishing the tariff band (banda tarifaria), and by connectivity, resolutions 937-RCR-2012, 938-RCR-2012, 939-RCR-2012, 940-RCR-2012, 941-RCR-2012, all of September 14, 2012, which resolved to reject the motions to revoke (recursos de revocatoria) filed by the Asociación Costarricense de Productores de Energía (ACOPE), Hidro Canalete S.A., Hidroeléctrica Caño Grande S.A., El Embalse S.A. and Compañía Hidroeléctrica Doña Julia S.R.L respectively; 4.- To return the administrative case file (expediente administrativo) to the Energy Intendency (Intendencia de Energía, IE) so that it proceeds to set a tariff, taking into consideration the criteria established in this legal opinion (dictamen) regarding the updating of the unit investment amount and correcting the calculation of the standard deviation (desviación estándar) of the investment cost data; 5.- To request the Dirección General Centro de Desarrollo de la Regulación, so that as soon as possible, it submits for its knowledge the proposed methodology to incorporate the environmental factor into the tariffs in question; 6.- To deem the administrative channel exhausted; 7.- To notify the parties of the resolution to be issued, in the manner indicated for this, as provided.

III.That in session 12-2013, of February 18, 2013, the Board of Directors (Junta Directiva) of the Regulatory Authority (Autoridad Reguladora), based on official communications 948-DGJR-2012 and 15-DGCDR-2013, cited herein, agreed, among other things, to issue this resolution.

THEREFORE (POR TANTO):

THE BOARD OF DIRECTORS OF THE REGULATORY AUTHORITY OF PUBLIC SERVICES (LA JUNTA DIRECTIVA DE LA AUTORIDAD REGULADORA DE LOS SERVICIOS PÚBLICOS)

I.To reject on procedural grounds the appeals (recursos de apelación) filed by Hidro Canalete S.A. and Compañía Hidroeléctrica Doña Julia S.R.L, against resolution 796-RCR-2012 for lack of standing (legitimación) and for lack of proper representation respectively.

II.To partially grant the appeals (recursos de apelación) filed by the Asociación Costarricense de Productores de Energía (ACOPE), El Embalse S.A. and Hidroeléctrica Caño Grande S.A. against resolution 796-RCR-2012, solely regarding argument 1, concerning the use of the index PCU221110221110 for updating the investment cost.

III.By reason of the foregoing, to partially revoke resolution 796-RCR-2012 of March 16, 2012, solely regarding the use of the index PCU221110221110 for updating the investment cost and regarding the data used to calculate the standard deviation (desviación estándar) for the purpose of establishing the tariff band (banda tarifaria), and by connectivity, resolutions 937-RCR-2012, 938-RCR-2012, 939-RCR-2012, 940-RCR-2012, 941-RCR-2012, all of September 14, 2012, which resolved to reject the motions to revoke (recursos de revocatoria) filed by the Asociación Costarricense de Productores de Energía (ACOPE), Hidro Canalete S.A., Hidroeléctrica Caño Grande S.A., El Embalse S.A. and Compañía Hidroeléctrica Doña Julia S.R.L respectively.

IV.To return the administrative case file (expediente administrativo) to the Energy Intendency (Intendencia de Energía, IE) so that it proceeds to set a tariff, taking into consideration the criteria established in this legal opinion (dictamen) regarding the updating of the unit investment amount and correcting the calculation of the standard deviation (desviación estándar) of the investment cost data.

V.To request the Dirección General Centro de Desarrollo de la Regulación, so that as soon as possible, it submits for its knowledge the proposed methodology to incorporate the environmental factor into the tariffs in question.

VI. To deem the administrative channel exhausted

VII. To notify the parties of the resolution issued at the indicated address

PUBLISH IN THE OFFICIAL GAZETTE (DIARIO OFICIAL) San José, February 21, 2013

Tariff band for new private hydroelectric generatorsBanda tarifaria para generadores hidroeléctricos privados nuevos

X. That the useful and necessary proceedings for the issuance of this resolution have been carried out

II. ANALYSIS AS TO FORM

IV. ANALYSIS ON THE MERITS

Artículo 1 — of said Law establishes that the Autoridad Reguladora will not be subject to the guidelines of the Executive Branch in fulfilling the powers granted to it by the same law.

V. CONCLUSIONS

VI. To deem the administrative channel exhausted

VII. To notify the parties of the resolution issued at the indicated address

X. Que se han realizado las diligencias útiles y necesarias para el dictado de la presente resolución

II. ANÁLISIS POR LA FORMA

IV. ANÁLISIS POR EL FONDO

V. CONCLUSIONES

VI. Dar por agotada la vía administrativa

VII. Notificar a las partes la resolución dictada en lugar indicado

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