SANTIAGO -(Dow Jones)- Chile's National Energy Commission, or CNE, said Wednesday it will cut by 5.2% the average regulated electricity wholesale price, or node rate, generators charge distributors operating on the country's central electricity grid, or SIC, for the May to October period.
The SIC supplies some two-thirds of electricity to Chilean homes and industries. This is the first drop in wholesale rates in two years.
In the northern SING grid, which supplies major copper mines and isn't interconnected with the SIC, the node rate will fall 6.2%, the commission added.
The CNE adjusts the node rate, a theoretical price for electricity charged to regulated customers, every six months. The node rate must lie within 10% of the average rate generators charge non-regulated customers for power and accounts for some 40%-50% of power bills.
In making adjustments, the agency takes into consideration the exchange rate between the dollar and the peso, 10-year demand projections, utilities' capital spending plans, water reservoir levels and the prices of oil, coal and natural gas.
The average consumer's power bill will fall 2.5%in the SIC and 5.1%on the SING because of the drop in the node rate, the CNE said.
Power generation costs have increased in recent years as limits in Argentine gas exports to Chile have forced some industries, including companies running gas-fueled power plants, to switch to more expensive fuels such as diesel.
The unexpected drop was mostly due to the peso's strength against the dollar. The peso reference levels used for this period are 14% stronger than the peso levels used for the October 2007 node rates, the CNE said.
The principal power companies supplying energy to the SIC grid are Empresa Nacional de Electricidad (NYSE:EOC) (EOC), AES Corp. (NYSE:AES) (AES) through its Gener (GENER.SN) unit, and Colbun (Santiago:COLBUN) (COLBUN.SN).
-By Carolina Pica, Dow Jones Newswires; 56-2-460-8544; carolina.pica@ dowjones.com
(END) Dow Jones Newswires 04-16-08 1128 Copyright (c) 2008 Dow Jones & Company, Inc.
