Rain seen diluting Chile wholesale electric prices
SANTIAGO, CHILE - Chilean wholesale electricity prices will trend lower until at least early 2009 thanks to rains which have refilled hydroelectric reservoirs starved by a drought, a unit of Banco Santander forecast.
Wholesale prices are those Chile's electricity generators charge the country's distributors. Typically, they represent nearly 60 percent of the total price paid by residential consumers.
"We expect a reduction of between 5 to 10 percent in wholesale prices in October and we will most likely see a fall in regulated prices into 2009," Diego Celedon, an analyst with Santander GBM, the bank's research unit, told reporters.
However, much will depend on how the volatile peso fares in coming months, as the government fixes its prices in dollars, he said.
In April the government decided it would cut wholesale electricity prices by 5.2 percent in the country's heavily populated south and center, citing a strong appreciation of the peso against the dollar.
Chile is in the midst of an energy squeeze, with Argentina restricting its exports of natural gas and costly oil derivative imports stoking domestic inflation.
Chile's main electricity generators are Endesa Chile END.SN, AES Gener CHG.SN and Colbun COL.SN. The big distributors include Chilectra CHE.SN and CGE CGE.SN.
Related News

Washington County planning officials develop proposed recommendations for solar farms
WASHINGTON - Incentives for establishing solar farms at industrial spaces instead of on prime farmland are among the ideas the Washington County Planning Commission is recommending for the county to update its policies regarding solar farms.
Potential incentives would include tax breaks on solar equipment and requiring developers to put power-grid connections and line extensions underground, Planning Commission members said during a Monday meeting.
The tax break could make it more attractive for a developer to put a solar farm on a roof or over a parking lot, which could cost more than putting it on farmland, said Commission member Dave Kline,…