The following shall not be accepted as costs of regulated companies:
- a)Fines imposed on them for non-compliance with the obligations established by this law.
- b)Unnecessary expenditures or those unrelated to the provision of the public service.
- c)Contributions, expenses, investments, and debts incurred for activities unrelated to the administration, operation, or maintenance of the regulated activity.
- d)Operating expenses disproportionate in relation to the normal expenses of equivalent activities.
- e)Investments rejected by the Regulatory Authority because they are considered excessive for the provision of the public service.
- f)The value of billings not collected by the regulated companies, with the exception of the percentages technically set by the Regulatory Authority." From the foregoing, it follows that, for tariff setting, the following shall not be accepted as costs, among others: unnecessary expenditures or those unrelated to the provision of the service and operating expenses disproportionate in relation to the normal expenses of equivalent activities.
Pursuant to the cited provisions, Aresep has exclusive and exclusionary competence in the regulation, setting, and supervision of the tariffs or prices of public services, including the tariffs of electricity supply services, and is obliged to carry out technical analyses of income, costs, and benefits to determine tariff settings, observing the principles of service at cost and financial equilibrium, given that the exercise of such powers has its constitutional basis in the provisions of article 46 of the Political Constitution.
In accordance with what is indicated by the cited legal provisions (articles 3 subsection b), 4 subsection c), 6 subsections a) and d), 14, 31, and 32 of Ley 7593), the Regulatory Authority has full competence to carry out the respective assessments that lead it to determine the costs necessary for the provision of the public service. In this context, we proceed to detail, for each company, the cost and expense items not considered or excluded, with due justification in light of the provisions of article 32 of Ley 7593: Altamira (Inversiones Eólicas Guanacaste S.A.): Expenses totaling ₡36,519,424.69 are excluded, according to the information presented by the company available in OT-055-2021 (folios 396 and 397) and in Annex 21 "Información de Contabilidad Regulatoria" of this report, for the reasons detailed below for each of the expenses not considered:
Campos Azules (Inversiones Eólicas Campos Azules S.A.): Expenses totaling ₡31,487,939.80 are excluded, according to the information presented by the company available in OT-055-2021 (folio 325) and in Annex 21 "Información de Contabilidad Regulatoria" of this report, for the reasons detailed below for each of the expenses not considered:
Fila de Mogote (Fila de Mogote DCR S.R.L.): Expenses totaling ₡35,344,555.46 are excluded, according to the information presented by the company available in OT-055-2021 (folios 154, 183 to 188, 328,329) and in Annex 21 "Información de Contabilidad Regulatoria" of this report, for the reasons detailed below for each of the expenses not considered:
Tilawind (Tilawind Corporation S.A.): Although this company presented the regulatory accounting (contabilidad regulatoria) corresponding to 2020, it supplied the requested clarifying information out of time, and additionally, it was necessary to send an additional communication to the company regarding pending information and some clarifying aspects. In this regard, the company presented the information required by the IE in the public hearing process and it was considered in the preparation of this report.
In relation to the analysis of the operating expenses (gastos de explotación) of this company, it is highlighted that the information reported in its regulatory accounting (contabilidad regulatoria) corresponds to costs and expenses for a period of 15 months (from October 2019 to December 2020), due to the modification in the fiscal year-end, established to end in December of each year, by virtue of the Law for the Strengthening of Public Finances (Ley 9635). The foregoing, given that prior to the aforementioned modification of the fiscal period, this company presented its accounting information as of September.
Vientos de la Perla (Vientos del Volcán S.A.): Expenses totaling ₡173,608,176.64 are excluded, according to the information presented by the company available in OT-055-2021 (folios 396 and 397) and in Annex 21 "Información de Contabilidad Regulatoria" of this report, for the reasons detailed below for each of the expenses not considered:
Vientos de Miramar (Costa Rica Energy Holding S.A.): Expenses totaling ₡20,517,481.13 are excluded, according to the information presented by the company available in OT-055-2021 (folio 374) and in Annex 21 "Información de Contabilidad Regulatoria" of this report, for the reasons detailed below for each of the expenses not considered:
Vientos del Este (Aeroenergía S.A.): The expense for procedures related to proceedings with the Regulatory Authority (complaints or queries) for an amount of ₡1,544,036.23 is excluded, because it is not considered necessary for the public service according to subsection b) of article 32, this according to the information presented by the company available in OT-055-2021 (folios 192 to 195, 214 to 216, 326, 327) and in Annex 21 "Información de Contabilidad Regulatoria" of this report.
Based on the previous data, given that said data are in colones, we proceeded to index them using the BCCR Manufacturing Price Index3 up to the month with the last published value at the time of the public hearing (August 2021).
3 https://gee.bccr.fi.cr/indicadoreseconomicos/Cuadros/frmVerCatCuadro.aspx?idioma=1&CodCuadro=%202526 Subsequently, these indexed values (which were in colones per kW) were converted to the United States dollar currency by dividing by the simple average of the BCCR Reference Sale Exchange Rate4, and finally, the weighted average of the operating costs (costos de explotación) of each plant by the installed capacity was calculated.
4 https://gee.bccr.fi.cr/indicadoreseconomicos/Cuadros/frmVerCatCuadro.aspx?idioma=1&CodCuadro=%20400 Therefore, the operating cost (CE) (costo de explotación) resulting from the procedure described above for a new private wind plant is US$104.75 per kW (see Annex 3).
c. Fixed Cost of Capital (CFC) (Costo Fijo del Capital) Through the CFC component, competitive returns are guaranteed for investors with those they could obtain in other investments with a similar risk level, in order to make the alternative of participating in the development of the plant attractive.
The CFC depends on the amount of the initial investment (M) and on the conditions of said investment (FC), among which are the level of leverage used (debt/capital contribution ratio), the financing conditions (interest rate, payment method and term), the expected rate of return by investors on their contributions, the investment recovery period (economic life), the age of the plant and its useful life, among others.
The CFC is calculated as follows:
CFC = M * FC Where M is the total amount of the unit investment, and FC is the factor reflecting the investment conditions.
The CFC depends on the following variables:
Unit investment amount (M) The investment cost represents the total costs necessary to build a generation plant under normal conditions for our country.
In this application of the methodology, the first calculation option included in resolution RJD-163-2011 was used, considering that data exists for it, which indicates the formation of a sample of at least 20 wind plants with capacities equal to or less than 20 MW, from reliable sources.
The investment amount is calculated as follows:
. From the information available at the Regulatory Authority on the wind plants in the current tariff setting, the data of the wind projects participating in the ICE calls 01-2012 and 02-2014, 6 Latin American projects (Chile, Argentina, Panama), and the original costs of the 7 new wind plants from the regulatory accounting data (datos de las contabilidades regulatorias) presented by the companies are included. With the previous information, there is a sample of 28 wind plants.
. For each of the wind plants in the sample, the year in which the investment cost was estimated is available; in the case of the 7 new wind plants, the date of entry into operation of each plant is considered, information requested from CENCE through OF-0392-IE-2021 of May 12, 2021, and provided by said entity through official communication 0810-305-2021 of May 21, 2021. (Annex 17).
. First, the investment cost values were indexed to August 2021, considering the last Producer Price Index for the Turbine and Transmission Equipment Industry (PCU33361-33361)5.
5 This information is obtained from the Bureau of Labor Statistics at: Bureau of Labor Statistics Data (bls.gov) . Subsequently, for this sample of indexed unit investment cost data, the weighted average by installed capacity is calculated to obtain the average investment cost value of the sample, which is US$2,017.02 per kW.
Finally, the standard deviation of the investment costs of the sample is calculated, obtaining a value of US$ 306.96 per kW. With the above information, the upper and lower limits of the tariff range are calculated, as will be detailed later.
Therefore, a weighted average investment value of US$ 2,017.02 per kW is obtained (see Anexo 12).
Investment Conditions Factor (FC) The FC factor is calculated using the following equation, which determines the amount of the uniform fee, applicable throughout the economic life, that the plant owner requires to recover their investment and obtain a reasonable return.
Where "v" is the economic life of the project, "e" is the age of the plant, "t" is the income tax rate, "?" is the return on capital contributions, "?" is the leverage, "i" is the interest rate, and "d" is the debt term.
a. Leverage Leverage is used to estimate the relationship between debt and equity, which is part of the leveraged beta formula defined later. As established by the tariff methodology, a weighted average by installed capacity of the most recent information regarding the financing level of each type of private electricity generation plant available at the Regulatory Authority will be used for this calculation.
For this sample, the weighted average by installed capacity of each plant was calculated. To perform the calculation, financing information for electrical projects available in the Aresep databases was used; additionally, in this tariff-setting proposal, the leverage information for the 7 new wind plants, obtained from the regulatory accounting with a cutoff date of December 31, 2020, was used. These leverage data were analyzed and validated by the IE. In the case of the Tilawind S.A. plant, the company provided the additional clarifying information requested by the IE during the public hearing process, so this plant was considered in the analysis corresponding to this report.
Therefore, information is available for 20 wind projects from the data of the 1st and 2nd ICE Calls, as well as the updated leverage information as of December 2020 corresponding to the regulatory accounting of the new wind plants.
The weighted average financial leverage of the projects for which information is available is 77.31% (see Anexo 4).
b. Return on Capital Contributions (?)
The level of return will be determined by the application of the Capital Asset Pricing Model (CAPM), according to the information sources indicated in resolution RJD-027-2014, which are the following:
. The risk-free rate (KL): It is the nominal rate (TCMNOM) of the United States of America (USA) Treasury Bonds. The rate with the same maturity period as the one used to calculate the risk premium is used, which is available on the United States Federal Reserve website, at the internet address: http://www.federalreserve.gov/datadownload/Build.aspx?rel=H15.
The data for the last 5 years is averaged. For this case, the average risk-free rate for the last 5 years is 2.02% (see Anexo 5).
. Risk Premium (PR): The variable called "Implied Premium (FCFE)" will be used, which is available on the website: http://www.stern.nyu.edu/~adamodar/pc/datasets/histimpl.xls The data for the last 5 years is averaged. For this case, the simple average of the risk premium for the last 5 years is 5.33% (see Anexo 6).
. Country Risk (RP): The value published for Costa Rica is considered, from the data called "Risk Premiums for the other markets" where the country risk is called "Country Risk Premium". The values for this variable and the unlevered beta will be obtained from the information published by Dr. Aswath Damodaran, at the internet address: http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/ctryprem.html The data for the last 5 years is averaged. For this case, the simple average of the country risk for the last 5 years is 4.61% (see Anexo 7).
. Relationship between debt and equity (D/Kp): It is estimated with the formula D/Kp=Y/(1-Y), where Y is the financial leverage. For this calculation, what is indicated in section 6.1.1 in the subsection called leverage (RJD-027-2014) will be used.
In this case, the leverage calculated in point a. above is used, which results in 77.31%.
. Unlevered Beta: For the unlevered beta value (?d), the "Utility General" values set in previous tariff settings are taken, and for the 2020 data, the value is taken from the information published by Dr. Aswath Damodaran at: http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/Betas.html. The data for the last 5 years is averaged. For this case, the value obtained for the unlevered beta is 0.2601 (see Anexo 8). When levered according to the provisions of the tariff methodology, it results in a levered beta level of 0.8806.
It is important to note that on this occasion, the marginal unlevered beta from the Excel file on Damodaran's website was used, which contemplates the tiered corporate tax, more aligned with the reality of companies whose income tax rate is also tiered in our country and whose tax regulations contemplate a series of deductible expenses that mean the total rate is not ultimately paid. Furthermore, upon consulting the author of the information source, it was clarified to us that the marginal rate must be used since interest payments are tax-deductible (which generates a tax shield and saves taxes) (see Anexo 19).
. Income tax rate: It is defined based on current legislation. The current income tax rate is 30% according to the Income Tax Law, Ley 7092.
Therefore, the level of return for new wind plants is 11.32% (see Anexo 9).
c. Interest Rate The monthly average of the values for the last sixty months of the rate published by the Central Bank of Costa Rica for loans to the industrial sector in dollars, from private banks, was used.
The arithmetic average of the last sixty months, that is, from July 2016 to August 2021, is 7.44% (see Anexo 10) considering the 60 months prior to the public hearing.
It is important to note that the Central Bank of Costa Rica modified the calculation methodology for the interest rates it publishes on its website, changing from window rates to effectively negotiated rates, starting in April 2019. The tariff methodology establishes that the monthly average of the last sixty months must be considered; this average from April 2019 to August 2021 corresponds to rates negotiated by private banks. As time passes, the average calculated for the last sixty months will consider more data on negotiated rates and fewer window rates, until the complete series corresponds to negotiated rates.
d. Economic Life of the Project (v) As established in resolutions RJD-163-2011 and RJD-027-2014, for the purposes of this model, the economic life of the project is 20 years, a period equal to that of the contract considered in the model to define the tariff. It is assumed that the economic life is half the useful life of the project, estimated at 40 years.
e. Debt Term (d) and Contract Term As established by resolutions RJD-163-2011 and RJD-027-2014, the debt term is 20 years. This duration has been assigned so that it is equal to the maximum term of the energy purchase-sale contract, which is the maximum allowed by law.
f. Age of the Plant Given that, in this methodology, the plants are new, a value of zero is assigned to this variable.
Therefore, applying the Investment Factor (FC) formula, a value of 0.1144 is obtained (see Anexo 11).
Finally, once the investment factor (FC) and the investment amount (M) have been calculated, both are multiplied to obtain the Fixed Cost of Capital (CFC), the result of which is US$ 230.68 per kW.
d. Definition of the Deviation for the Tariff Band According to the current methodology (RJD-163-2011) and its amendments, to establish the tariff band, the following steps are carried out:
g. The standard deviation corresponding to all the data used to estimate the average investment cost was calculated, resulting in US$ 306.96 per kW (see Anexo 12).
h. The upper limit is established as the updated average investment cost plus the standard deviation, i.e., US$ 2,017.02 + US$ 306.96 per kW = US$ 2,323.97 per kW (see Anexo 12).
i. The lower limit is established as the updated average investment cost minus 3 standard deviations, i.e., US$ 2,017.02 - 3 * US$ 306.96 per kW = US$ 1,096.14 per kW (see Anexo 12).
At no time may the prices paid for the purchase of electrical energy be higher than the upper limit of the current tariff band, nor lower than the lower limit of that band, as established in Article 21 of the Reglamento al Capítulo I de la Ley No. 7200.
e. Calculation of the Tariff Band and Tariff Structure Below is a summary of all the variables calculated in this tariff application, where the price respects the technical specifications defined in the cited resolutions DGT-R-48-2016 and DGT-R-012-2018, which resolved the mandatory use of the electronic invoice system, in accordance with the technical and regulatory specifications defined therein, where it is worth mentioning that the unit price must be composed of a number with 13 integer digits and 5 decimal places:
The seasonal hourly structure used is the one approved by RJD-163-2011. The reference tariff structure for a new wind electricity generation plant according to the dimensionless parameters approved in resolution RJD-163-2011 is:
In this regard, it is necessary to clarify that the tariff methodology establishes that the parameters composing the tariff structure must be updated based on the ICE reports. Therefore, the IE, through OF-0100-IE-2021 of February 9, 2021, reiterates to the ICE what was requested on previous occasions regarding the update of the dimensionless parameters, requiring it to submit the duly justified information, the proposed dimensionless values, as well as an exhaustive detail of the input data, assumptions, technical support, and applied methods. In response, the ICE responds through 0610-018-2021 of February 26, 2021, referring to the "Propuesta para la estructura horario-estacional en los precios de compra de energía a generadores independientes" (Proposal for the seasonal-hourly structure in energy purchase prices for independent generators), sent to the IE on April 8, 2020, via note 5500-0306-2020.
In general terms, in said proposal, the ICE stressed the need for a tariff structure to issue economic signals and optimize the installation and use of infrastructure. It also noted that using marginal costs was inconvenient due to their volatility and their subsequent impact on the cash flow of the ICE and private generators.
Regarding the update of the tariff structure, it is necessary to indicate that since 2019, the IE has held meetings with the ICE to obtain clarifications on the criteria used in the proposed update of the new dimensionless values. Along these same lines, this Intendencia has reiterated that this information be provided in the terms indicated in official letters OF-0078-IE-2019, OF-0427-IE-2020, and OF-0799-IE-2020.
For its part, as recorded in response letters 0510-351-2020, 5500-0538-2020, and 5500-0538-2020, although significant changes are proposed, the ICE has insisted that these numerical values are supported by expert judgment, without providing the technical justification for the criteria used in each of the incorporated dimensionless parameters; a situation that limits the possibility of carrying out a well-founded regulatory analysis, which is a necessary condition to explain to all interested parties, with solid and traceable technical support, the changes incorporated into the tariff structure.
In this context, despite the efforts made by the Intendencia to have this information provided in the requested terms, the ICE continues to fail to technically justify each of the dimensionless values and their differences between the current and proposed parameters. This proposal must be duly justified, since these variations in the parameters represent incentives for the regulated entities to deliver energy at different times of the day and year, which entails a different economic retribution. Thus, by virtue of the foregoing, it was not possible to consider the proposal sent by the ICE in this study.
In this regard, it is important to indicate that these dimensionless parameters in the calculation of the tariff structure must be the result of exercising the needs to meet the country's electricity demand (load curve), types of plants, generation source, economic pre-dispatch, etc. In this sense, since the technical reasons used by the ICE to determine the level and differences between the current and proposed numerical values are not available, it is impossible for this Intendencia to modify and implement them, given the absence of calculation traceability for the proposed data.
Therefore, the justification provided by the ICE for its technical analysis has been insufficient for the Intendencia, since it is vital to have this information to provide regulatory support and motivate the changes to be made regarding the current tariff structure.
f. Other Considerations . Currency in which the tariff will be expressed As established by resolution RJD-163-2011, the tariffs resulting from the detailed methodology will be expressed and invoiced in United States of America dollars (US$ or $).
The conditions under which payments are made will be defined in accordance with what the parties establish contractually, and based on the applicable regulations.
. Adjustment of the tariff band values The tariff band values will be reviewed at least once a year, in accordance with the provisions of Ley 7593.
. Obligation to present information Other considerations: To improve this methodology in the future, it is established that new private wind generators to which the tariffs established through this tariff methodology are applied are obligated to annually present audited financial information (including operational and maintenance, administrative, and individual investment expenses) as well as their due justification to Aresep. In this way, Aresep may have better information to adjust the model to real operational conditions. For these purposes, the company's audited financial statements must be presented at least annually.
. Application of the methodology The model presented is applicable to tariff settings for energy sales to the ICE by private generators producing with new wind plants, within the framework of Chapter 1 of Ley No. 7200, and for those purchases and sales of electrical energy from new private wind plants with conditions similar to those established in Chapter 1 of Ley No. 7200, which are legally feasible and must be regulated by Aresep. A new plant is understood to be one whose investment in physical capital has not yet been used in any electricity production process. Consequently, new plants by definition could not have generated energy that was sold under any electricity purchase-sale contract or for self-consumption purposes.
. Regulatory Accounting To indicate to the new private wind generators that provide the public electricity service in its generation stage under Chapter I of Ley No. 7200, that they must comply with resolution RIE-132-2017 "Implementación de La Contabilidad Regulatoria para el Servicio Público Suministro de Electricidad en su Etapa de Generación, prestado por Generadores privados amparados en el Capítulo I de la Ley No. 7200, Consorcios de las Empresas Públicas, Municipales y Cooperativas que se dediquen a la Generación de Electricidad y otros similares que el marco legal autorice" (Implementation of Regulatory Accounting for the Public Electricity Supply Service in its Generation Stage, provided by Private Generators under Chapter I of Ley No. 7200, Consortia of Public, Municipal, and Cooperative Companies dedicated to Electricity Generation and other similar entities authorized by the legal framework) of December 22, 2017, and its updates.
[.]
IV. CONCLUSIONS
1. From the application of the tariff methodology approved for new private wind generators, it is obtained that the average plant factor is 48.69%, the average financial leverage value is 77.31%, the return is 11.32%, the average operating cost is 104.75 US$ per kW, and the average investment cost is 2,017.02 US$ per kW.
2. Based on the update of the variables that make up the tariff methodology for new private wind generation plants, a reference tariff of US$ 0.07864 is obtained, a lower band (lower limit) of US$ 0.05395 per kWh, and an upper band (upper limit) of US$ 0.08687 per kW.
3. The proposed tariff structure for private generation with new wind plants is as follows:
[.]
II.That, regarding the public hearing, from the cited official letter IN-0113-IE-2021, it is pertinent to extract the following:
[.]
1. Opposition: Instituto Costarricense de Electricidad, legal entity identification number 4-000-042139, represented by Mr. Kenneth Lobo Méndez, bearer of identity card number 2-0555-0804, in his capacity as Special Administrative Attorney-in-Fact.
Observations: Presents a written submission (visible on folio 69).
Notifications: To email: [email protected] for Gricelio Cubero Badilla, [email protected] for Francisco Cordero Hidalgo, and [email protected] for Juan Carlos Salas Hidalgo.
Summary:
a. On operating costs: The ICE indicates that the operating cost analysis does not contemplate cost optimization signals and that the growth recognized by the IE is not related to the evolution of prices reflected in the IPP-MAN nor to the wage growth of the private sector.
The ICE states that private generators justify the items and the information provided, which are mostly related to operating and maintaining the public service; however, it is the IE's responsibility to analyze and discriminate whether these costs provided meet the criteria of reasonableness, proportionality, and suitability to be incorporated into the tariff paid by the electricity service customer, a process that is not demonstrated to have been carried out in the file.
Furthermore, it indicates that in ordinary tariff settings for electricity sales to which the ICE is subjected, the IE has always carried out an exhaustive process of analysis and requests for additional information, for which, if not satisfied, it incorporates its own estimates. However, it argues that with private generators, it limits itself to excluding items, maintaining, in the vast majority of cases, the values presented by the companies without any questioning.
The ICE requests that the costs presented by private generators be recognized for tariff purposes in such a way that their optimization is sought, and that their growth aligns with the evolution of the IPP-MAN.
Response:
In response to the arguments presented by the opponent, it is indicated that in all tariff settings, the IE conducts a rigorous technical analysis of the information provided by private generators, with the purpose of ensuring the principle of service at cost, in accordance with the methodology and its current reforms, seeking to harmonize the interests of users, consumers, and public service providers.
In this sense, the information presented through the Regulatory Accounting of each of the new wind plants, in accordance with resolution RIE-132-2017, allows reflecting the balances of the accounting accounts related to the provision of the public service, so the Intendencia has reviewed and evaluated the data obtained from said regulatory accounting of the plants used for the calculation of operating costs.
In this regard, it is important to mention that, concerning operating costs, the referenced methodology RJD-163-2011 established:
"The operating cost represents the costs necessary to maintain and operate a wind plant under normal conditions for our country. It does not include depreciation expenses, financial expenses, and taxes associated with utilities or profits.
The calculation of this value will be done by determining a sample of the operating costs (operation, maintenance, and administrative) of electrical plants, to the extent possible, similar to the plants for which tariffs are intended to be applied." In compliance with the foregoing and as established in Articles 14, 24, 32 of Ley 7593 and Article 16 of the Reglamento of said Law, the IE, in the follow-up processes to the information presented by the companies in their regulatory accounting, in order to verify its veracity regarding the accounting records, their respective allocation by activities, as well as to validate that the balances presented in the cost, expense, and investment items correspond to elements necessary for the provision of the public service, proceeded to request the companies to demonstrate that such costs/investments are those necessary to operate and maintain the public service of electricity generation for each plant through the disaggregation, justification, and presentation of supporting information for the amounts recorded in said accounting accounts. This is because, according to resolution RIE-132-2017, although the items listed in the regulatory chart and manual of accounts have balances, this does not necessarily imply their recognition at the tariff level.
Consistent with the above, the ICE is incorrect in indicating that the analysis carried out by the IE is not demonstrated in the file, because as a result of this review and analysis process by the IE, which is recorded in the file processing this study (ET-042-2021) and in OT-055-021 as detailed in section b. Costos de Explotación (CE) (Operating Costs (CE)), from the additional information provided by the generators at the time of the public hearing, it was possible to carry out a purging of the operating costs, in which the justifications and supporting documentation provided by the companies were assessed to determine the relationship of said items and their balances with the provision of the public service. This was done in order to exclude as operating costs those that do not comply with what is established by the current tariff methodology.
Therefore, what is indicated by the ICE that the values presented by private generation companies are recognized without any questioning is an erroneous statement, since the IE, in strict adherence to the tariff methodology, has carried out a process of review, analysis, and assessment of the operating costs, resulting in the exclusion of those that have not been sufficiently and reasonably justified as necessary to provide the public service or that have been considered excessive or disproportionate, in compliance with the provisions of Article 32 of Ley 7593.
Now, the ICE states that the growth recognized by the IE is not related to the evolution of prices reflected in the IPP-MAN nor to the private sector wage growth, about which it is pertinent to mention that the manufacturing price index (IPP-MAN) from the Central Bank of Costa Rica (BCCR) is used for updating operating costs. In this regard, the current methodology is clear in indicating that operating costs are the necessary costs for the adequate development of the regulated activity. Therefore, although the evolution of the factors mentioned by the opponent may be taken as a reference in the process of reviewing and evaluating the companies' costs and expenses, it is not the only element to consider, as the tariff analysis must be comprehensive.
In this context, the IE carries out the respective technical reviews and assessments of the justifications and information provided by each company, with the purpose of determining that the operating costs recognized in the tariff are indeed those necessary to maintain and operate the plant, in accordance with the tariff methodology.
b. Regarding the calculation of the unit investment amount: The ICE indicates that in the sample for the calculation of unit investment, the IE considered the projects Montes de Oro, Segeléctrica, Guayabos, and Montezuma twice, both for the 2012 call and the 2014 call, being the same projects.
In this regard, it requests that the projects Montes de Oro, Segeléctrica, Guayabo, and Montezuma presented in the ICE Call 01-2012 be excluded from the sample of plants and projects used to determine the unit investment, because the updated costs of these same four projects are presented in the ICE Call 02-2014, and they should not be duplicated.
Response:
In response to what was indicated, once the assessment was carried out by the IE, it was determined that the ICE's statement is correct, considering that the sample for calculating the unit investment included the projects Montes de Oro, Segeléctrica, Guayabos, and Montezuma twice, in the 2012 and 2014 calls. Based on the foregoing, the opponent is informed that, once the respective assessments were made, the investment costs in this report have been adjusted.
c. Regarding the update of interest rates: The ICE points out that the IE uses the interest rate values for the 60-month period from July 2016 to June 2021, resulting in an average interest rate of 7.62%. However, it indicates that because the public hearing will be held on September 2, 2021, the last 60 months prior to the public hearing would end in August 2021 and not in June 2021, as the IE did in this proposal.
The ICE requests that the interest rate on dollar loans from private banks to the industrial sector be updated to the corresponding period from September 2016 to August 2021, to comply with the values for the last 60 months indicated by the methodology.
Response:
In this regard, the ICE is informed that the average interest rate was duly updated in this report, considering the average from September 2016 to August 2021, as evidenced in the section "c. Costo fijo del capital (CFC)" (Fixed Cost of Capital (CFC)) and Anexos 10 and 20.
d. Regarding the update of the selling exchange rate: The ICE indicates that because the update of the variables is as of June 2021 according to the report, the IE uses the average exchange rate for that month. However, the IE must use the average selling exchange rate for the month closest to the hearing, in order to be consistent with the other variables.
The ICE requests that the reference selling exchange rate values from the BCCR be updated to the month of July 2021.
Response:
In this regard, the ICE is informed that the exchange rate was duly updated in this report, considering the average for August 2021, as evidenced in Anexo 20.
2. Opposition: Asociación Costarricense de Productores de Energía (ACOPE), legal identification number 3-002-115819, represented by Mr. Mario Alvarado Mora, identity card number 04-0129-0640, in his capacity as General Attorney-in-Fact with sum limit.
Observations: Does not make use of the floor at the public hearing.
Presents a written submission (visible on folio 70).
Notifications: To email: [email protected] Summary:
Regarding the calculation of the plant factor: ACOPE indicates that the Intendencia de Energía calculates the plant factor including the wind plants Guanacaste (with a capacity of 52250 kW), Orosi (with a capacity of 51750 kW), and Chiripa (with a capacity of 50985 kW), all of them BOT-type plants with a contract under Chapter 2 of Ley 7200, and with installed capacities close to 50 MW. In this regard, it states that since they differ greatly from the size of the plants being tariffed in this setting, the Intendencia de Energía is requested to exclude them from the plant factor calculation.
Response:
Regarding the sample used for the plant factor: the current methodology approved in resolution RJD-163-2011 establishes in section "iv. Expectativas de venta (E)" (Sales Expectations (E)) the following:
"(.)
For the determination of the plant factor (factor de planta, fp), load factor or plant factor values shall be considered, solely from national plants, considering the information for the last five available years, according to the Regulatory Authority's database. The plant factor information from the tenders held to acquire energy shall be included as additional data to the actual information used.
For these purposes, a weighted average of the load factors of private generators that have been generating for a substantial portion of the respective year (10 or more months) or what was indicated by the bidder in the tenders shall be considered.
The weighting for each year shall be based on the installed capacity of each project. The weighting to obtain the total for the five years plus the additional information from the calls for bids shall be based on the installed capacity of each of the years and data included." In this regard, as observed from the excerpt of the methodology cited above, for the calculation of the plant factor, a weighted average of the plant factors of national plants of private generators that have been generating for a period of 10 months or more in a year must be considered. Therefore, as detailed in section 3.a Sales Expectations (Expectativas de Venta, E), the IE, in compliance with the provisions of the tariff methodology, proceeded to calculate the plant factor considering the information from all national private wind generation plants, according to the available information.
3. Opposition: Fila de Mogote D C R Sociedad de Responsabilidad Limitada, legal ID number 3-102-155950, represented by Mr. Enrique Morales González, identity card number 01-0606-0457, in his capacity as General Attorney-in-Fact without limit of sum.
Observations: Does not make use of the floor at the public hearing. Submits a written brief (visible at folio 71).
Notifications: To the email address: [email protected] Summary:
a. Regarding the calculation of the plant factor: Fila de Mogote DCR indicates that the Energy Directorate calculates the plant factor including the wind plants Guanacaste (with a capacity of 52250 kW), Orosi (with a capacity of 51750 kW), and Chiripa (with a capacity of 50985 kW), all of which are BOT-type plants with a contract under Chapter 2 of Law 7200, and with installed capacities close to 50 MW. In this regard, it states that since these differ greatly from the size of the plants being tariffed in this setting, the Energy Directorate is requested to exclude them from the calculation of the plant factor.
Response:
The arguments presented by the company Fila de Mogote DCR are identical to those contained in the written opposition submitted by ACOPE.
Therefore, the opposing party is referred to the response given to ACOPE in opposition 2.
b. Regarding operating costs: The company affirms that in the tariff proposal, after the submission of regulatory accounting, exclusions were made to its operating costs that do not seem justifiable, and it proceeds to provide clarifications on each of the excluded costs.
Fila de Mogote requests that the clarifications made regarding the operating costs that were excluded from the regulatory accounting be considered and included in the analysis performed.
Response:
Regarding operating costs, based on the information provided, a technical assessment of their recognition was carried out, using the corresponding justifications in the position as support, in the following terms:
1. An analysis was performed on the additional information provided by the company, therefore the exclusion of the expense for "Wind Plant Employees Medical Insurance" in the amount of ?8,752,132.06, under account 5.2.1.03.01.Personnel, is maintained, because the company did not provide information justifying this item as a proper and necessary expense for the provision of the public service; furthermore, it is clarified that the costs of social charges and the respective work risk insurance policy were considered. Therefore, since these items are already recognized, in accordance with subsections b and d of Article 32 of Law 7593, this expense is considered unnecessary and excessive.
2. Regarding the expense "Tests for New Plant Personnel Entry" in the amount of ?842,575.00, under account 5.2.1.03.01. Personnel, based on the justification provided by the company in its position regarding the necessity of this item for the provision of the public service, the recognition of this expense is adjusted as part of the operating costs.
3. Regarding the expense "Office Consumables" in the amount of ?1,269,779.23 under account 5.2.1.03.06. Others, the company indicates as justification that, as stated at the time of providing the information, this item includes consumables that are office materials and supplies required by personnel working in plant operation and monitoring. However, this statement does not coincide with what was indicated in the homologation of regulatory accounts in the chart of accounts for the 2020 period, in which the company indicates that this item refers to expenses associated with employee entertainment, an expense not necessary for the provision of the service.
By virtue of the foregoing, a contradiction arises between the two arguments presented by the company, which leads to uncertainty that prevents this Directorate from determining whether this item is necessary for the public service, therefore the exclusion of this expense from operating costs is maintained.
4. Regarding the expense "Office Consumables" in the amount of ?1,189,732.67 under account 5.2.1.03.06. Others, the company indicates in its position that it corresponds to per diems for employees when they hold meetings, visits, or transfers outside the plant. However, because an amount of ?1,927,216.37 for per diems is also recognized tariff-wise under account 5.2.1.03.06. Others, the exclusion of said expense is maintained as it is considered disproportionate or excessive, according to subsection d of Article 32 of Law 7593.
5. Regarding the expenses "Legal Services for Legal Compliance required by entities" in the amount of ?4,478,828.57, "Tax Compliance" in the amount of ?3,740,831.00, and "Plant Personnel Payroll Calculation Service" in the amount of ?3,917,051.98, the company did not provide in its justification the necessary information to demonstrate that these items and amounts correspond to a necessary expense for the provision of the public service. It is important to note that, as indicated in report IN-0087-IE-2021, the administrative services for managing the administrative part of the plant, namely, human resources, accounting, administration of the contract with ICE, legal, among others, are included as part of the tariff expenses recognized for the company.
Therefore, the exclusion of the expenses in question is maintained as they are not justified as necessary for the public service and are considered excessive or disproportionate according to subsections b and d of Article 32.
Consequently, this Directorate agrees with what was indicated by the company Fila de Mogote only with regard to account 5.2.1.03.01 Salaries, for the recognition of the expense "Tests for New Plant Personnel Entry" in the amount of ?842,575.00, and therefore this adjustment is incorporated into section b. Operating Costs (Costos de Explotación, CE) of this report.
4. Opposition: Aeroenergía S.A., legal ID number 3-101-155347, represented by Mr. Salomón Lechtman Koslowski, identity card number 1-0527-0594, in his capacity as General Attorney-in-Fact without limit of sum.
Observations: Does not make use of the floor at the public hearing. Submits a written brief (visible at folios 72 to 77).
Notifications: To the email addresses salo@gecoenergía.com and [email protected] Summary:
Regarding the calculation of the plant factor: Aeroenergía S.A. indicates that the Energy Directorate included the values of the Orosí, Guanacaste, and Chiripa wind plants, which operate with a BOT contract under Chapter 2 of Law 7200 and have installed capacities of up to 50 MW, which exceeds the 20 MW of the private wind plants intended to be tariffed.
Therefore, it states that plants with BOT contracts and capacities close to 50 MW should not be considered for purposes of calculating the plant factor.
Response:
The arguments presented by the company Aeroenergía S.A. are identical to those contained in the written opposition submitted by ACOPE. Therefore, the opposing party is referred to the response given to ACOPE in opposition 2.
5. Opposition: Inversiones Eólicas Campos Azules Sociedad Anónima, legal ID number 3-101-644281, represented by Ms. María Fernanda Esquivel Rodríguez, identity card number 1-1167-0010, in her capacity as General Attorney-in-Fact without limit of sum.
Observations: Does not make use of the floor at the public hearing.
Submits a written brief (visible at folio 78).
Notifications: To the email addresses: [email protected] and [email protected] Summary:
Regarding operating costs: The company opposes the exclusion of costs in the amount of ?31,487,939.80 colones, regarding which it states that ARESEP omits providing the reasoning for excluding the operating costs, and furthermore that such exclusions affect the real calculation of the plant's operating costs, reducing the possibilities of operating and covering its operational and contractual obligations. It also indicates that it has not been given the opportunity to share all the supporting evidence that may be required by ARESEP.
The company Campos Azules requests that all the justifications for operating costs presented be taken into account, so that they are included as valid for operating and delivering a public service.
Response:
The company did not provide the necessary information to justify and demonstrate that the excluded items and their amounts correspond to necessary expenses for the provision of the public service. It is pertinent to highlight that in section b. Operating Costs of report IN-0087-IE-2021 brought to public hearing, the Directorate analyzed each excluded expense individually, detailing the respective justification for its exclusion in compliance with Article 32 of Law 7593 and the principle of cost-of-service, therefore the company is incorrect in stating that ARESEP did not provide the reasoning for the exclusion of said items.
In this regard, the company erroneously claims that it was not given the opportunity to provide the required supporting information, considering that as part of the follow-up to the presentation of the regulatory accounting, through official letter OF-0442-IE-2021 of June 7, 2021, the company was requested to demonstrate that said costs or expenses are those necessary to operate and maintain the public electricity generation service. In that sense, the company, in its response letter of June 17, 2021, did not submit the justifications or supporting information that would allow determining that said expenses were necessary to provide the public service.
Furthermore, as the public hearing is an additional space for the company to provide additional information in this regard, in the information supplied it also does not provide the necessary justifications to demonstrate that said costs or expenses are necessary to maintain and operate the plant, as established by Law 7593 and the principle of cost-of-service.
Regarding the exclusion of items in operating costs, based on the information provided, a technical assessment of the justifications given by the company in its position for each expense was carried out, in the following terms:
1. Regarding the expense for "donations" classified under account 5.2.3. Social and environmental costs in the amount of ?16,918,436.99 colones, its exclusion is maintained since the company did not demonstrate, within the information supplied, the reasons for determining that this item is necessary to maintain and operate the plant.
2. Regarding the expenses for "other consultancies" and "external legal services" in the amounts of ?13,852,802.81 and ?716,700 respectively, classified under account 5.3.1.01.03 Contracted services, the company provided generic arguments without providing, within the information supplied, the justifications for which these items are necessary to provide the public service. In addition, administrative services for managing the administrative part of the plant, namely, human resources, accounting, commercial, bank management, among others, are included as part of the tariff expenses recognized. Therefore, the exclusion of the expenses in question is maintained as they are not justified as necessary for the public service and are considered excessive or disproportionate according to subsections b and d of Article 32.
6. Opposition: Costa Rica Energy Holding S.A., legal ID number 3-101-457242, represented by Ms. María Fernanda Esquivel Rodríguez, identity card number 1-1167-0010, in her capacity as General Attorney-in-Fact without limit of sum.
Observations: Does not make use of the floor at the public hearing.
Submits a written brief (visible at folio 78).
Notifications: To the email addresses: [email protected] and [email protected] Summary:
Regarding operating costs: The company opposes the exclusion of costs in the amount of ?20,517,481.13 colones, regarding which it states that ARESEP omits providing the reasoning for excluding the operating costs, and furthermore that such exclusions affect the real calculation of the plant's operating costs, reducing the possibilities of operating and covering its operational and contractual obligations. It also indicates that it has not been given the opportunity to share all the supporting evidence that may be required by ARESEP.
Furthermore, it argues that there is an error in the tariff calculation Excel sheet, as the amount taken to the tariff calculation is ?1,257,785,625.97, which represents exclusions of ?51,563,101.04, while further down ARESEP only justifies ?20,517,481.13, so the amount ?1,288,831,245.88 should be used.
The company Energy Holding requests that all the justifications for operating costs presented be taken into account, so that they are included as valid for operating and delivering a public service, and that the arithmetic of the tariff calculation be corrected in the terms previously indicated.
Response:
The company did not provide the necessary information to justify and demonstrate that the excluded items and their amounts correspond to necessary expenses for the provision of the public service. It is pertinent to highlight that in section b. Operating Costs of report IN-0087-IE-2021 brought to public hearing, the Directorate analyzed each excluded expense individually, detailing the respective justification for its exclusion in compliance with Article 32 of Law 7593 and the principle of cost-of-service, therefore the company is incorrect in stating that ARESEP did not provide the reasoning for the exclusion of said items.
In this regard, the company erroneously claims that it was not given the opportunity to provide the required supporting information, given that as part of the follow-up to the presentation of the regulatory accounting, through official letter OF-0444-IE-2021 of June 7, 2021, the company was requested to demonstrate that said costs or expenses are those necessary to operate and maintain the public electricity generation service. In that sense, the company, in its response letter of June 17, 2021, did not submit the justifications or reasons that would allow determining that said expenses were necessary to provide the public service.
Furthermore, as the public hearing is an additional space for the company to provide additional information in this regard, in the information supplied it also does not provide the necessary justifications to demonstrate that said costs or expenses are necessary to maintain and operate the plant, as established by Law 7593 and the principle of cost-of-service.
Regarding the exclusion of items in operating costs, based on the information provided, a technical assessment of the justifications given by the company in its position for each expense was carried out, in the following terms:
1. Regarding the expense for "donations" classified under account 5.2.3. Social and environmental costs in the amount of ?7,406,894.07 colones, its exclusion is maintained since the company did not demonstrate, within the information supplied, the reasons why this item is necessary to maintain and operate the plant.
2. Regarding the expenses for "external legal services" in the amount of ?13,110,587.06, classified under account 5.3.1.01.03 Contracted services, the company provided generic arguments without providing, within the information supplied, the justifications for which these items are necessary to provide the public service. In addition, administrative services for managing the administrative part of the plant, namely, human resources, accounting, commercial, bank management, among others, are included as part of the tariff expenses recognized for the company. Therefore, the exclusion of the expenses in question is maintained as they are not justified as necessary for the public service and are considered excessive or disproportionate according to subsections b and d of Article 32.
Regarding the company's statement that there is an error in the amount of operating expenses in the tariff calculation Excel sheet, the IE, after the corresponding assessment, determined that what the company indicates is correct, in that the Excel sheet where the tariff model is applied excluded an expense amount of ?51,563,101.04, when it was appropriate to exclude ?20,517,481.13. Therefore, the expense amount for the company Energy Holding is adjusted in the calculation of operating costs, as can be observed in section b. Operating Costs (CE) of this report.
7. Opposition: Inversiones Eólicas Guanacaste S.A., legal ID number 3-101-512403, represented by Ms. María Fernanda Esquivel Rodríguez, identity card number 1-1167-0010, in her capacity as General Attorney-in-Fact without limit of sum.
Observations: Does not make use of the floor at the public hearing. Submits a written brief (visible at folio 78).
Notifications: To the email addresses: [email protected] and [email protected] Summary:
Regarding operating costs: The company opposes the exclusion of costs in the amount of ?36,519,424.69 colones, regarding which it states that ARESEP omits providing the reasoning for excluding the operating costs, and furthermore that such exclusions affect the real calculation of the plant's operating costs, reducing the possibilities of operating and covering its operational and contractual obligations. It also indicates that it has not been given the opportunity to share all the supporting evidence that may be required by ARESEP.
The company Inversiones Eólicas Guanacaste requests that all the justifications for operating costs presented be taken into account, so that they are included as valid for operating and delivering a public service.
Response:
The company did not provide the necessary information to justify and demonstrate that the excluded items and their amounts correspond to necessary expenses for the provision of the public service. It is pertinent to highlight that in section b. Operating Costs of report IN-0087-IE-2021 brought to public hearing, the Directorate analyzed each excluded expense individually, detailing the respective justification for its exclusion in compliance with Article 32 of Law 7593 and the principle of cost-of-service, therefore the company is incorrect in stating that ARESEP did not provide the reasoning for the exclusion of said items.
In this regard, the company erroneously claims that it was not given the opportunity to provide the required supporting information, given that as part of the follow-up to the presentation of the regulatory accounting, through official letter OF-0441-IE-2021 of June 7, 2021, the company was requested to demonstrate that said costs or expenses are those necessary to operate and maintain the public electricity generation service. In that sense, the company, in its response letter of June 17, 2021, did not submit the justifications or reasons that would allow determining that said expenses were necessary to provide the public service.
Furthermore, as the public hearing is an additional space for the company to provide additional information in this regard, in the information supplied it also does not provide the necessary justifications to demonstrate that said costs or expenses are necessary to maintain and operate the plant, as established by Law 7593 and the principle of cost-of-service.
Regarding the exclusion of items in operating costs, based on the information provided, a technical assessment of the justifications given by the company in its position for each expense was carried out, in the following terms:
1. Regarding the expense for "donations" classified under account 5.2.3. Social and environmental costs in the amount of ?22,385,765.20 colones, its exclusion is maintained since the company did not demonstrate, within the information supplied, the reasons why this item is necessary to maintain and operate the plant.
2. Regarding the expenses for "other consultancies" and "external legal services" in the amounts of ?12,427,913.49 and ?1,705,746.00 respectively, classified under account 5.3.1.01.03 Contracted services, the company provided generic arguments without providing, within the information supplied, the justifications for which these items are necessary to provide the public service. In addition, administrative services for managing the administrative part of the plant, namely, human resources, accounting, commercial, bank management, among others, are included as part of the tariff expenses recognized for the company. Therefore, the exclusion of the expenses in question is maintained as they are not justified as necessary for the public service and are considered excessive or disproportionate according to subsections b and d of Article 32.
8. Opposition: Vientos del Volcán Sociedad Anónima, legal ID number 3-101-512404, represented by Ms. María Fernanda Esquivel Rodríguez, identity card number 1-1167-0010, in her capacity as General Attorney-in-Fact without limit of sum.
Observations: Does not make use of the floor at the public hearing.
Submits a written brief (visible at folio 78).
Notifications: To the email addresses: [email protected] and [email protected] Summary:
Regarding operating costs: The company opposes the exclusion of costs in the amount of ?173,608,176.64 colones, regarding which it states that ARESEP omits providing the reasoning for excluding the operating costs, and furthermore that such exclusions affect the real calculation of the plant's operating costs, reducing the possibilities of operating and covering its operational and contractual obligations. It also indicates that it has not been given the opportunity to share all the supporting evidence that may be required by ARESEP.
The company Vientos del Volcán requests that all the justifications for operating costs presented be taken into account, so that they are included as valid for operating and delivering a public service.
Response:
The company did not provide the necessary information to justify and demonstrate that the excluded items and their amounts correspond to necessary expenses for the provision of the public service. It is pertinent to highlight that in section b. Operating Costs of report IN-0087-IE-2021 brought to public hearing, the Directorate analyzed each excluded expense individually, detailing the respective justification for its exclusion in compliance with Article 32 of Law 7593 and the principle of cost-of-service, therefore the company is incorrect in stating that ARESEP did not provide the reasoning for the exclusion of said items.
In this regard, the company erroneously claims that it was not given the opportunity to provide the required supporting information, given that as part of the follow-up to the presentation of the regulatory accounting, through official letter OF-0443-IE-2021 of June 7, 2021, the company was requested to demonstrate that said costs or expenses are those necessary to operate and maintain the public electricity generation service. In that sense, the company, in its response letter of June 17, 2021, did not submit the justifications or reasons that would allow determining that said expenses were necessary to provide the public service.
Furthermore, as the public hearing is an additional space for the company to provide additional information in this regard, in the information supplied it also does not provide the necessary justifications to demonstrate that said costs or expenses are necessary to maintain and operate the plant, as established by Law 7593 and the principle of cost-of-service.
Regarding the exclusion of items in operating costs, based on the information provided, a technical assessment of the justifications given by the company in its position for each expense was carried out, in the following terms:
1. Regarding the expense for "donations" classified under account 5.2.3. Social and environmental costs in the amount of ?6,269,872.85 colones, its exclusion is maintained since the company did not demonstrate, within the information supplied, the reasons why this item is necessary to maintain and operate the plant.
2. Regarding the expenses for "External Legal Services" and "Tax Advisory" in the amounts of ?17,508,294.04 and ?153,587.02 respectively, classified under account 5.3.1.01.03 Contracted services, the company provided generic arguments without providing, within the information supplied, the justifications for which these items are necessary to provide the public service. In addition, administrative services for managing the administrative part of the plant, namely, human resources, accounting, commercial, bank management, among others, are included as part of the tariff expenses recognized for the company. Therefore, the exclusion of the expenses in question is maintained as they are not justified as necessary for the public service and are considered excessive or disproportionate according to subsections b and d of Article 32.
[.]
III.That in accordance with what is stated in the preceding resultandos and considerandos and in the merit of the case file, it is appropriate to set the tariff band for all new private wind generators that sign a contract for the sale of electric energy to the Instituto Costarricense de Electricidad under Chapter I of Law No. 7200; as is hereby ordered.
THE ENERGY DIRECTORATE
I.To set the following tariff band for all new private wind generators that sign a contract for the sale of electric energy to the Instituto Costarricense de Electricidad under Chapter I of Law No. 7200, corresponding to the following tariff structure:
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II.To indicate to the new private wind generators to which the tariffs established through this tariff methodology RJD-163-2011 are applied, that they are obligated to annually submit to ARESEP the audited financial statements of the generation service they provide, a detailed breakdown of expenses and costs, as well as the total cost of the investment made. The foregoing must be accompanied by the proper justification that relates them to the provision of the public electricity supply service in its generation stage.
III.To indicate to the new private wind generators that provide the public electricity service in its generation stage under Chapter I of Law 7200, that they must comply with resolution RIE-132-2017 "Implementation of Regulatory Accounting for the Public Electricity Supply Service in its Generation Stage, provided by Generators covered under Chapter I of Law No. 7200, Consortia of Public, Municipal, and Cooperative Companies engaged in Electricity Generation, and other similar entities authorized by the legal framework" of December 22, 2017, and its updates.
IV.To indicate to the private generators that sell electric energy to ICE under Law No. 7200, that if they fail to comply with the two preceding provisions (5. and 6.), the respective documentation shall be referred to the Dirección General de Atención al Usuario (DGAU), for the purpose of opening the corresponding administrative procedures.
V.To consider the positions of the participants in the public hearing addressed in accordance with what is set forth in Considerando II of this resolution.
VI. It shall become effective as of the day following its publication in the official gazette La Gaceta
In compliance with the provisions of Articles 245 and 345 of the General Public Administration Act (Ley General de la Administración Pública, LGAP), it is hereby informed that the ordinary remedies of revocation (revocatoria) and appeal (apelación), as well as the extraordinary remedy of review (revisión), may be filed against this resolution. The revocation remedy may be filed before the Energy Superintendent (Intendente de Energía), who is responsible for resolving it, and the appeal and review remedies may be filed before the Board of Directors (Junta Directiva), which is responsible for resolving them.
In accordance with Article 346 of the LGAP, the remedies of revocation and appeal must be filed within three business days counted from the business day following notification, and the extraordinary remedy of review must be filed within the time limits set forth in Article 354 of said law.