Latin America electricity prices: How countries compare

Scrapping a controversial rise in the price of electricity was among measures outlined by embattled Chilean President Sebastián Piñera on Tuesday evening to ease simmering tensions over living costs and inequality.

Piñera's announcement came amid the worst protests and violence the country has seen in decades.

Authorities will introduce a “stabilization mechanism” to reduce prices to the level they were at in the first half of the year. Details are pending. 

Finance minister Felipe Larraín told local broadcaster Radio Cooperativa that the overall battery of measures would cost US$1.20bn a year, half of which authorities could cover via budgetary changes and larger taxes on high-income earners.

Last month, following the price increase announcement, energy minister Juan Carlos Jobet cited a weakening peso and the impact this has on the price of coal and gas needed to fuel the country’s thermoelectric power plants.

These are “fuels that we don’t have in Chile that we have to import, bring in, and they depend on the exchange rate,” he said.

“Therefore, when the peso weakens a lot, like what has happened now, unfortunately this has an effect on electricity bills.”

Jobet (pictured) said Chile’s ongoing shift towards renewables would help “solve the problem in the long term” by reducing exposure to fallout from unfavorable forex fluctuations. 

The peso has been weakening since the end of February, when it was trading at around 650 to the US dollar. On Wednesday, the exchange rate was at around 726:1. 

Chile aims to phase coal-fired generation out of the energy matrix by 2040 as it builds its solar and wind capacity. 

The generator most exposed to coal-fired generation is AES Gener. 

ELECTRICITY PRICES: HOW NATIONS COMPARE

According to data complied by Peru’s energy and mining investment regulator Osinergmin, Uruguay has the highest residential rate for users who consume 125kWh a month and Paraguay the cheapest.

In Chile, users who consume 125kWh a month pay US$18.75 a month. 

For business users who consume 50,000kWh a month, the most expensive is Panama and the cheapest Paraguay.

In the study, which corresponds to 2Q19, Osinergmin looks at 14 countries.

Residential electricity rates - Monthly consumption 125kWh

Credit: BNamericas with Osinergmin data

Business electricity rates - Monthly consumption 50,000 kWh

Credit: BNamericas with Osinergmin data

Picture credit: Government of Chile/YouTube