Sunday, November 20, 2016

moving to mexico -- electricity cost

The results are in.

No. Not the Academy nominations for best actor. (That is not until January.) And certainly not whether the Republicans will end up with 51 or 52 seats in the senate. (The answer is 52.)

The results are the cost of my electricity for the first two months of having air conditioning in my bedroom.

I have two electric meters. One is for the two bedrooms and the kitchen on the west side of the house. The other meter is for the two bedrooms and library on the east side -- and the pool pump.

On this billing cycle, the west side of the house used $249 (Mx) worth of electricity. About $12 (US). The east side used $2,011 (Mx). About $95 (US).

Let me remind you: that is for two months. People complain that electricity in Mexico is expensive. It may be by the kilowatt hour (kWh). But I never had electric bills this low in Salem. Well, not since the Reagan administration.

CFE (the Mexican governmental electricity monopoly) provides a lot of information on its bills. My question was what effect did running my air conditioner have on my overall bill.

The best comparison would be the same billing cycle from last year. The bill does not show what I paid for that period. But I used 522 kWh. This cycle, I used 948 KWh. The air conditioner sucked up nearly twice as much juice as last year.

Most electric companies charge users different rates as usage climbs. You can see that on my bill. I travelled through three usage zones, picking up higher rates per kWh at each border.

There is an additional border I almost ended up crossing, and it would have been very expensive. You can see it illustrated on the multi-colored gauge.

The government of Mexico subsidizes the usage of electricity at a rate varying by season and temperature throughout the country -- up to a maximum. If a user crosses that maximum border, the subsidy does not apply.

In my case, the Mexican government lowered what would have been my actual electric bill by a total of nearly $3,000 (Mx). About $142 (US). Effectively, the Mexican government subsidizes the use of my air conditioner and my pool pump. As long as I stay below the cut-off point.

The original purpose of the subsidy was to encourage the poor to use electricity while giving them a break on the price. As is true with almost all similar governmental subsidies, it has not worked out that way. A recent study shows that only 1% of the subsidies benefit the poor. Instead, the vast majority of the subsidies benefit middle-class (people like me) and wealthy users.

The current Mexican government recognizes the problem. The subsidies were scheduled to be reduced and then eliminated -- to be replaced by a targeted cash payment to the poor. The idea was for CFE to sell electricity at the actual cost of generation. But I have heard nothing more of that reform.

If it occurs, my bill would be about $245 (US) a month. And even that would be a small price to pay for living here in Mexico.

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