Friday, November 1, 2013
Once again our own Martha McNabb showed the boys how to fish, taking 2nd overall with a 525 lb Blue at the Bisbee and winning the most prize money. In fact it was ladies day on the podium as Linda Williams took first place with a 774 lb Blue, the largest ever boated by a female angler in the B&B. Read more here on the Bisbee web site.
Congratulations Martha and crew!!
Monday, September 23, 2013
Article taken from "The Baja Insider"
Mexico's Residential Electric Subsidies - Looks like they will stay
Mexico's Residential Electric Subsidies - Looks like they will stay
The people of Mexico have enjoyed a variety of subsidies including gasoline and electricity. The World Bank and some Mexican legislators say the subsidy promotes waste and is too expensive for the state.
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The Baja California Sur customer will continue to save 17% to 43% of their electric bill through this subsidy.
North Americans use an average 10 times more electricity per citizen than do Mexicans, in a large part to the relative cost of electricity in Mexico and lower average income levels.
In Mexico there has been for decades, a very juicy subsidy to residential electrical bills and to industrial high volume users. Over the past decade the cost of this subsidy to the Mexican federal government has been growing at a significant rate. But by law, written into the legislation establishing any subsidy in Mexico is the important word 'temporary'. Now, there is legislative move afoot to reform or remove the current subsidy schedule
In 2009 the World Bank released a white paper recommending that Mexico's residential electric subsidies be entirely scrapped. In 2009 the average U.S. customer was paying $0.096 per kW/hr and the average Mexican customer was paying $0.090 per kW/hr, both enjoying some of the cheapest electricity in the world. Removal of the subsidies would rocket Mexico to the other end of the cost scale, with countries like Japan and Germany, which paid close to $0.20 per kW/hr. (Note: This is not the electric rate; it is the price the average residential customer paid in these countries, including subsidies, supports & including the HVD in Mexico) The vast majority of electricity in Mexico is generated by diesel thermo-electric plants and the cost of the fuel has risen more than 75% in the 7 year period preceding the study. Fuel costs risen even further since 2009. Nearly all of the electricity on the peninsula is generated by this method and demand for electricity has risen even more sharply here, as the 'Gringo Invasion' has resulted in a dramatic increase in demand; to power air conditioners and our more consumptive culture. This, of course, is in addition to the explosive growth of the peninsula within the Mexican community and the growth of the middle class, who also desire to sleep in air conditioned comfort.
The World Bank recommended improvements in the efficiency of CFE, the national power company and a LPE, the Mexico City electricity provider. They recommended modernization of the infrastructure and business management of the system to result in a 20% cost per delivered Kw/hr. But with a double edged sword, the side that cuts the consumer was the removal of all subsidies.
In an attempt to make a silk purse of a sow's ear they stated that electricity was 'too cheap' in Mexico, promoting waste, and not stimulating the use of more expensive but energy saving technology. That this over use was adding to environmental abuse and climate change. Raising the cost of electricity would promote greater conservation. However, it is important to remember that if your yearly income contains less than 10 decimal places to the left, the World Bank is probably not on your side, despite their "Madison Avenue" tag line.
Why is this happening now?
For several decades Mexico has enjoyed cheap energy and brought in significant national income from petroleum, which supported generous social programs which in turn have brought strong growth to the Mexican economy. Income taxes are less than 1/2 that of the U.S. for a majority of the working class.
Subsidies have supported fuel prices, electricity, and health and infrastructure expansion. These investments are paying off, this year Mexico is expected to have 2 to 3 times the economic growth of the United States, which has a different idea as to where to spend money.
Those oil riches are coming to an end. In the next few years Mexico will pass from being an oil exporting country to an oil importer. Mexico is beginning to tighten the belt before they run out of rope.
By then end of the decade Mexico will also enter the exclusive club of being one of the ten most powerful economies on the planet. It is unclear whether removing subsidies will accellerate or delay this progress. Just that much more of the burden of progress will shift to the poor can not be debated.
What would be the impact on the economy in Mexico?
Who would be forced to give up something, would be every economic level of consumer below the mid-line. A local newspaper suggests that if you are paying $500 pesos ($40USD) per month now your Baja power bill would jump to $1800 pesos ($141USD) with the removal of the subsidy. (when calculating your price increase it is not linear, the subsidy decreases with usage, until you reach the 'high volume user' category)
In an economy where the growing middle class has become accustom to air conditioning, 56 inch TV's and electric blenders, there would be a significant number on the fringe of each of these 'luxuries' that would have to give them up. This would result in a drop in sales of these products and a further reduction in VAT tax revenue to the Federal government. Not to mention the increase in hot, sweaty, sleepless and disgruntled Mexicans, who felt their path forward being obstructed.
With the removal of the fuel subsidies already in progress and this proposed electric rate increase – it will be a lot for some economic strata to absorb.
What does it mean for Baja?
For North Americans living in most parts of Baja California Sur the air conditioning comes on in the afternoons in April and is running full time from June to October. My air conditioning system usually gets shut down for the year about mid November. For me and many others, air conditioning is an essential for surviving/enjoying life in our region through the summer months.
Water is another life giving essential, which is becoming increasingly dependent on electricity. Production of water through current desalinization techniques is very energy consumptive, as any cruiser will tell you. With every Baja Sur municipality now using desalinated drinking water within their jurisdiction, water prices will rise too.
In Baja California Sur most of our electricity currently comes from diesel generation. (although another 800mW solar plant is in the works) Anyone with an eye to the future knows that our electric rates are destine to climb steadily as petroleum prices rise, but the subsidy removal would create a much larger single jump in the immediate future.
With the majority of North Americans investing in Mexico to retire on fixed incomes, the increased cost of electricity and our Gringo consumptive needs, the cost savings of moving to Mexico would be significantly lessened.
The real estate market in Baja has endured these past few years, subsisting mostly on sales to Mexican nationals, where home financing has actually become easier in many respects. Some real estate projects have failed, while others hang on by their fingernails, awaiting a new wave of North American buyers to which their product is geared.
With travel prices increasing; with appliances, electronics and groceries costing more than most U.S. locations and now fuel prices approaching equivalency, removing additional cost advantages to North American retirees will not benefit southbound investment. With the bulk of the expatriates choosing the states of Baja California and Baja California Sur to make home, part or full time, this may have a dramatic regional impact.
Thursday, April 25, 2013
Thursday, February 14, 2013
First let me confess: I was in La Paz all day and missed the parade. Fortunately, I have some photos from my friend June and found a great video on YouTube by Bernadette. So if you missed it like I did, here you go.
Thursday, January 31, 2013
Tuesday, December 25, 2012
Cheri is an artist and an art therapist. She quickly found willing art subjects in our cute little burros. I love her art and here are a few drawings she shared with me.