energy

Power hike to affect businesses

Consumers using 500 kilowatt hours per month will enjoy a $27.9 million government subsidy.

Electricity use approaches current capacity, but new power plants are in the works.

Maydée Romero/LA PRENSA

Power: Panama´s energy use is increasing due to the demands of a growing population.951270

The business and industrial sector will see a rise in power costs next year, the Autoridad de Servicios Públicos (Asep) said yesterday.

Costs will increase two or three cents per kilowatt between January and June 2008.

Residential consumers who use less than 500 kilowatt hours per month, which accounts for 90 percent of the total users, will not see any increase thanks to a $27.9 million subsidy from the government. This includes about 670,000 households.

On average, there will be a 3 cent increase per kilowatt for Elektra Northeast clients who consume more than 500 kilowatt hours of energy and 2 cents for Edemet customers.

Edechi clients will see the smallest increase, with prices rising just a cent per kilowatt. That is because the company has contracts generating hydroelectric power.

If the government had not provided a subsidy, the average increase for all 754,000 customers around the country would have been 2 cents, or an increase from 15 cents to 17 cents per kilowatt.

Customers with low voltage demand from Elektra Northeast, including offices, restaurants, hotels and other businesses, will receive an increase of 4 cents, pushing up their rates from 18 to 22 cents per kilowatt.

"This is a significant increase," Asep's manager Victor Urrutia said. He recommends that consumers take steps to start reducing their consumption by using energy efficient appliances and light bulbs. Reducing the use of air conditioning is another way to conserve energy, Asep's manager said.

Government officials expressed concern that industries and businesses will simply pass on the additional cost to consumers. Industrialist Gabriel Diez agreed, saying he thinks the increase in power rates "will have an impact on production costs, which will be absorbed by buyers."

Diez, who served on a commission for energy savings, added that the impact of energy production costs vary considerably, depending on the type of activity. "In an industry such as ice cream production, which requires constant refrigeration, production costs are higher than in a factory," he said.

The 754,000 customers in Panama require 1,024 megawatts daily, and that demand is expected to increase next year to 1,0102.

Although this figure is less than the country's total production capacity of 1,400 megawatts, plants going off-line during peak hours could mean potential shortages.

Moreover, hydroelectric plants do not always have enough water to operate at full capacity, especially during Panama's dry season.

At the moment there are a number of power generation plants under construction which are expected to become operative in 2008 and 2009 and meet the country’s energy needs. The Panama Canal Authority will bring a 36-megawatt plant online in May 2008. A 10 megawatt "mini-hydro" plant will also begin functioning during the summer of 2008, as well as a 40-megawatt plant in Balboa that is slated to begin operating in August.