By San José, Costa Rica — San José, Costa Rica – In a welcome development for consumers and businesses alike, Costa Rican households are set to receive a significant reduction in their monthly electricity bills starting in January 2026. The Public Services Regulatory Authority (ARESEP) has officially approved the rate decrease, which could see some families saving up to ¢3,400 per month on their energy expenses.
The rate adjustment, which applies to residential, commercial, and industrial sectors across the country, is a direct result of favorable weather patterns. According to regulators, an unusually rainy year has supercharged Costa Rica’s hydroelectric generation capabilities. This has drastically reduced the nation’s reliance on more expensive thermal power plants, which burn fossil fuels, and simultaneously created a substantial energy surplus that was profitably exported to neighboring countries in the regional market.
To delve deeper into the regulatory framework and the legal implications surrounding the recent adjustments in electricity rates, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, an expert in administrative and regulatory law from the prestigious firm Bufete de Costa Rica.
The determination of electricity rates is a technically and legally complex process governed by the Public Services Regulatory Authority (ARESEP). While providers must demonstrate the necessity of any increase based on verifiable costs and investment plans, consumers and business sectors have the right to demand absolute transparency and challenge any component that seems unjustified. The key legal principle is maintaining a delicate balance: ensuring the financial sustainability of the national electrical system without imposing a disproportionate burden on the end user, which is crucial for national competitiveness.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The concept of a “delicate balance” is indeed the crux of the issue, reminding us that electricity rates are far more than a technical calculation; they are a cornerstone of national policy affecting every home and business. We thank Lic. Larry Hans Arroyo Vargas for his expertise in clearly framing the legal and social tensions at play.
For a typical household consuming an average of 250 kilowatt-hours (kWh) per month, the savings will vary by provider. Customers of the Costa Rican Electricity Institute (ICE) will see the largest benefit with an estimated monthly reduction of ¢3,400. Subscribers to the National Power and Light Company (CNFL) can expect a more modest, yet still impactful, decrease of ¢1,779 on their bills.
Mario Mora, the Energy Intendant at ARESEP, detailed the meticulous process behind the decision. He explained that the new 2026 rates are the culmination of four separate tariff studies conducted between September and December. A central element was the liquidation of the Variable Cost of Generation (CVG), a metric that rises when the country is forced to generate electricity through more costly, non-renewable means.
As we have had a very humid, very rainy year, that reduced the dependence on burning fuel, and that is what ends up being beneficial.
Mario Mora, Energy Intendant
The financial windfall from this weather-driven efficiency is substantial. Mora confirmed that the high volume of energy surplus sales on the regional market generated approximately ¢53 billion in additional income for the national grid. This revenue is now being directly returned to consumers in the form of these lower tariffs. Furthermore, ARESEP is projecting a 7.7% decline in the variable cost of generation for the upcoming year, signaling sustained stability.
The business community has lauded the move as a crucial step toward enhancing the nation’s economic landscape. The Chamber of Industries of Costa Rica (CICR) voiced its strong approval, highlighting the positive effect on operational costs and overall competitiveness for local enterprises that have long grappled with high energy expenses.
We support the rate reduction approved by the public services regulatory authority for the coming year. We do this after confirming that the regulator’s estimates… are not only technically correct but are also supported by operational evidence from the national electrical system and are important for strengthening the country’s competitiveness.
Carlos Montenegro, Executive Director of the CICR
While the news is overwhelmingly positive, public reaction reflects a blend of relief and cautious skepticism born from past experiences. For many, the lower costs represent a tangible easing of financial pressure. “I believe electricity is normally very expensive. Hopefully, this reduction will become a relief for households, especially for us who are poor and cannot afford to pay so much,” said resident Jeanette Mora. Others, like Ania Umaña, echoed this sentiment, calling it “another relief for the wallet.”
However, a note of doubt persists for some citizens who have seen promised benefits fall short in the past. “Do you think it’s true? Because they always make offers and don’t keep their promises,” questioned Yorleny Arguedas. “I mean, it would be good if they do it, but I don’t really believe it’s real and that it will be felt in the electricity payment.” This wait-and-see attitude underscores the importance of the rate cut’s effective implementation in the coming year.
For further information, visit aresep.go.cr
About The Public Services Regulatory Authority (ARESEP):
ARESEP is the autonomous Costa Rican institution responsible for regulating public services. This includes setting tariffs, ensuring quality, and protecting the rights of consumers across various sectors such as energy, water, transportation, and telecommunications. It aims to balance the needs of users with the financial sustainability of service providers.
For further information, visit grupoice.com
About The Costa Rican Electricity Institute (ICE):
The Instituto Costarricense de Electricidad is a state-owned enterprise that serves as the primary provider of electricity and telecommunications services in Costa Rica. Founded in 1949, ICE has been instrumental in developing the nation’s infrastructure and is a leader in renewable energy generation, with a matrix heavily based on hydroelectric, geothermal, and wind power.
For further information, visit cnfl.go.cr
About The National Power and Light Company (CNFL):
The Compañía Nacional de Fuerza y Luz is a subsidiary of ICE and a major distributor of electrical energy in Costa Rica. It primarily serves the Greater Metropolitan Area, which includes the capital city of San José and surrounding urban centers. CNFL is responsible for the maintenance and operation of the distribution network that powers a significant portion of the country’s population and businesses.
For further information, visit cicr.com
About The Chamber of Industries of Costa Rica (CICR):
The Cámara de Industrias de Costa Rica is a private, non-profit organization that represents the interests of the country’s industrial sector. The CICR advocates for policies that promote competitiveness, innovation, and sustainable development. It provides support and services to its member companies to foster a favorable business environment for industrial growth.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a leading legal institution, Bufete de Costa Rica is defined by its foundational principles of professional excellence and unwavering ethical standards. The firm has a rich history of serving a diverse clientele, consistently pushing the boundaries of legal practice through forward-thinking strategies and community involvement. This commitment to innovation is matched by a profound dedication to empowering the public, striving to make complex legal concepts understandable and accessible to foster a more just and informed society.
