MercoPress. South Atlantic News Agency

Chile subsidizes electricity to low income homes

Chilean President Ricardo Lagos administration decided to soften the impact of new energy rates by subsidizing the increase in electricity bills for lower income homes.

A total of 1,4 million families equivalent to over six million people will be benefited with the system that compensates the 5 to 11% increase in electricity bills as a consequence of new legislation regulating the industry's generation and distribution.

The benefit will cover 100% of the increase for bills corresponding to June, July, August and September. However in spring the subsidy will begin to be reduced and will be cut by half in summer months.

The monthly subsidy is equivalent to 2,5 US dollars for a residential bill with a monthly average consumption below 140 kwh. From October until March 2006 it will drop to 1,5 US dollars per month.

Chilean Economy minister Luis Sanchez Castellon estimated the cost of the benefit for the Treasury to be in the range of 24 million US dollars.