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COOPELESCA, Costa Rica

The COOPELESCA cooperative experience: Energy democracy at work in a rural context

Costa Rica is an outstanding example of a country with universal public services delivery. It has extended electricity services – as well as water, health and education – to all social groups and every region of the country, with remarkable indicators for equity, quality, affordability, public ethos and environmental sustainability.

The COOPELESCA cooperative experience: Energy democracy at work in a rural context

By Daniel Chavez

Electricity from renewable sources

Since its foundation in 1949, the Instituto Costarricense de Electricidad (ICE, Costa Rican Electricity Institute), a state-owned enterprise active in the fields of energy and telecommunications, has evolved as one of the pillar institutions of this welfare state.

In March 2015, the Costa Rican government announced that the country had gone 75 days without using fossil fuels by relying exclusively on renewable sources to generate power, prompting massive news coverage by international media (e.g. CNN, The Guardian and Time).

The country’s many rivers, volcanoes and mountains allow for the production of clean and affordable hydro, geothermal and wind power. Costa Rica is able to produce enough electricity to power its economy and social needs with relatively low environmental impacts. In the first trimester of 2016, 97% of the electricity generated came from renewable sources: hydroelectric power plants generated 65% of the total, wind farms contributed 16%, geothermal added 14%, while biomass was 2% and solar was 0.02%. Thermal plants only served to cover 3% of the country’s electricity needs, consolidating a trend to use fossil fuels only as a backup generation source (Arias, 2016).

National overview 

In 2015 Costa Rica attained an electrification index of 99.3% (ICE, 2015), the second highest in Latin America, only behind Uruguay. Power generation was partially liberalised in the 1990s, but it remains almost entirely in the hands of public or cooperative enterprises. Distribution and commercialisation of electricity is the responsibility of four state-owned companies – one national, one regional and two municipal – and four cooperatives, with no participation whatsoever by profit-driven private companies. ICE is responsible for 38% of the energy distributed in the country, and its regional subsidiary Light and Power Company (CNFL, active in the metropolitan area of San Jose), for 41%. The two municipal enterprises, the Public Services Company of Heredia (ESPH) and the Electric Board of Cartago (JASEC), account for 12% of distributed power. The four rural electrification cooperatives (COOPEGUANACASTE, COOPELESCA, COOPESANTOS and COOPEALFARO) distribute the remaining 9%.

The Costa Rican cooperative experience

Costa Rica has four large electricity cooperatives, with a total of 180,393 members (CONELECTRICAS, 2015) and a service area that covers more than a fifth of the national territory. Together, they supply electricity to 392,071 users, mostly living in rural settlements where neither the state-owned nor the for-profit companies were interested or able to operate. They have also provided jobs for 1,963 workers. Moreover, these cooperatives “are owned and operated by energy users and community members, and because they ensure active community involvement [they] provide solutions to common energy challenges like setting, developing and enforcing policies in rural communities” (Cooperatives Europe, 2015:11).

The Costa Rican cooperatives have been active since the 1960s. The four cooperative enterprises are completely self-sufficient; they are entirely not-for-profit and reinvest every financial surplus in improving the quality and the coverage of their services. They are also continually expanding the scope of their operations beyond their original mission, for example into telecommunications, retail, media and insurance services.

In 1989, the cooperatives joined to create the Consorcio Nacional de Empresas de Electrificación de Costa Rica (CONELECTRICAS R.L.), a consortium that aimed to defend the interests of the cooperative sector and engage in common power generation operations, policy advocacy and provision of technical services. [1] The consortium owns and operates two hydropower plants with an installed capacity of 43 MW. The remaining electricity needs of the cooperatives are met by the national state-owned utility ICE, with which they have had a mostly supportive and synergetic relationship. When a neoliberal government threatened to privatise ICE in 2000, for example, they united to defend it along with a broad multisectoral coalition.

Path to nearly universal access to electricity

The Costa Rican cooperatives are not entirely unique, as similar rural electrification cooperatives exist in other countries in the South.

But the key factors that enabled their success in this Central American country are a complex combination of social, political and economic factors, which created an auspicious institutional environment. Universal coverage of electricity services in urban areas was achieved in the first half of the past century, providing a sound technical and financial foundation for expansion into rural areas. In the late 1940s, the Costa Rican welfare state was established, after a fleeting civil war that concluded with a pact backed by the country’s main political forces. The social-democratic and developmentalist path that the country followed in the post-war period was characterised by political stability, strong state intervention in the economy and the implementation of progressive social policies (Chavez, 2014). By the mid-1960s, rural electrification had become a hot issue in the political agenda. Consequently, “within the context of a government genuinely committed and willing to invest in rural development, combined with the support of an experienced and effective supply utility and a strong egalitarian tradition, Costa Rica’s rural electric cooperatives were established and have thrived” (Foley, 2007: 18).

The experience of COOPLESCA

The Cooperativa de Electrificación Rural de San Carlos (COOPELESCA) is located in the Huetar Norte region, at the Nicaragua border. The area serviced by the cooperative covers the whole of the canton of San Carlos and some districts of the cantons of Los Chiles, San Ramón, Grecia and Alajuela (all in the province of Alajuela), plus one district of the canton of Sarapiquí (province of Heredia). The cooperative headquarters are in Ciudad Quesada, a city of 43,000 inhabitants.

When the cooperative was founded, the region was experiencing a high rate of immigration and other substantial transformations. The production of meat, milk, timber, sugar, coffee and rice was increasing. But the lack of electricity supply proved a big obstacle to economic and social development, as services were restricted to the region’s main towns – Ciudad Quesada, Florencia and Venecia – and the biggest farms, which relied on privately run, small-scale diesel or hydro plants.

The cooperative was founded in January 1965 with the participation of 365 members and an initial capital of CRC45,750 (approximately US$5,300). It began to supply electricity in May 1969, building 259 kilometres of distribution lines and connecting 1,065 users. COOPELESCA continued to grow and flourish in the ensuing decades, becoming a driving force for social and economic progress in an area of the country that until then had remained largely underdeveloped.

Expansion of services and ambition

In the 1980s COOPELESCA became responsible for street lighting through agreements with the municipal governments of the region. It also launched a cable television station (TV Norte) to provide regional media and communication services. In the 1990s, the cooperative entered the business of electricity generation, building or buying its own small-scale dams and partnering with the other three cooperatives to build a hydroelectric plant.

In 2007 COOPELESCA launched the Infocomunicaciones project, an initiative seeking to provide internet services to bridge the digital divide in the northern region. Later that year, the cooperative opened its first warehouse and shop in Ciudad Quesada selling electrical appliances as a way to supply affordable goods to its members. In 2008, COOPELESCA began to offer insurance services – mainly a popular fire insurance – seeking both to strengthen the financial sustainability of the cooperative and the provision of a broader range of services to its affiliates.

In 2009, COOPELESCA completed the extension of a 69-kV transmission line that will ensure greater capacity, quality and reliability of electricity services for the next 30 years, self-financed through a soft loan by the state-run National Institute for the Promotion of Cooperatives (INFOCOOP).

In 2013, COOPELESCA began to operate the Cubujuquí hydroelectric plant, with an output of 22.4 MW. It also bought another hydro plant, La Esperanza, enabling the cooperative to cover 82% of its electricity needs with its own generation sources.

Natural environment defender

The public mission of the cooperative includes the preservation of the country’s natural environment. In 2013 COOPELESCA obtained ‘carbon neutral’ certification, the first power distributor in Latin America to achieve this. In 2015 the cooperative announced that it had offset its entire carbon footprint through diverse environmental actions, mainly the purchase of land at risk of environmental degradation. A portion of the monthly payment of every member has served to buy 1,124 hectares of environmentally fragile areas within the Juan Castro Blanco National Park. The cooperative has also acquired land in the areas surrounding its hydropower projects, in order to contain the negative environmental impacts of commercial farming (COOPELESCA, 2015).It has also brought benefits to residents in power generation project areas mainly via participatory design of local development plans to encourage and support community initiatives (e.g. in Cubujuquí and La Vieja de San Carlos).

Challenges

Costa Rican citizens have plenty of reasons to be proud of its sustainable and democratically controlled electricity system. Even if all conditions that led to the success of the nation’s cooperatives are not present elsewhere, valuable lessons can be applied in other countries of the South.

Environmental activists and energy experts from around the world have praised Costa Rica for its decision to rely on renewable sources of power, but they have also expressed caution given that climate change may worsen and rain patterns become more unstable in Central America. Costa Rica needs to prepare for changing weather conditions that would challenge today’s reliance on hydropower, by expanding solar and wind power capacity. COOPELESCA is already exploring new projects in these two areas, but at present practically all the energy it generates and distributes comes from hydroelectric plants.

And even though projects run by the cooperatives are relatively small in scale, Costa Rica’s environmental organisations have warned that most of the country’s rivers might be already overexploited (Federación Ecologista, 2013). In addition, the proliferation of dams, both small and large, might lead to overproduction of energy, as well as contribute to the expansion of commercial forest plantations, agribusiness production, tourism enclaves and the imposition of genetically modified crops. Local communities have also denounced the impacts of relatively small hydropower projects, which in some cases have involved the loss of artisanal fishing and recreational spaces.

[1] The published mission of the consortium is “to strengthen its members by promoting and implementing joint generation projects and other initiatives related to the electricity sector, contributing to their development as energy enterprises in accordance with the principle of environmental protection and the values of the cooperative movement.”

References

Arias, L. (2016) ‘Costa Rica’s electricity mostly from renewable sources in 2016’, The Tico Times, 16 April.

Chavez (2014) ‘An exceptional electricity company in an atypical social democracy: Costa Rica’s ICE’, in D. McDonald (ed.), Rethinking Corporatization and Public Services in the Global South. London: Zed Books.

CNN (2015) ‘Costa Rica’s power grid runs on renewable energy’, 27 March.

CONELECTRICAS (2015) ’25 años en defensa y generación de un desarrollo sostenible para el progreso de nuestras asociadas y nuestro país’. San Jose: CONELECTRICAS R.L.

COOPELESCA (2015) 50 años. Una historia de solidaridad con visión de futuro. Ciudad Quesada: COOPELESCA.

Cooperatives Europe (2015) Building People-Centred Enterprises in Latin America and the Caribbean: Cooperative Case Studies. Brussels: Cooperatives Europe.

Federación Ecologista (2013) ‘Declaratoria del Encuentro de comunidades afectadas por represas’, 18 March.

Forley, G. (2007) ‘The Cooperative Experience in Costa Rica’, in D.F. Barnes (ed.), The challenge of rural electrification: Strategies for developing countries. Washington, DC: Resources for the Future.

Poschen, P. (2013) ‘Foreword’, in ILO, Providing clean energy and energy access through cooperatives. Geneva: International Labour Office (ILO).

The Guardian (2015) ‘Costa Rica uses only renewable energy for first 75 days of 2015 – video report’, 26 March

Time (2015) ‘How Costa Rica Went 75 Days Using Only Clean Electricity’, 1 April.

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