Is It Really Cheaper To Live In San Miguel?
Part III: Utilities—Water, Electricity, Gas, Telephone and Internet
By Jim Karger

In this five-part series, Karger looks at the commonly shared belief that it is less expensive to live in Mexico, specifically in San Miguel de Allende, than in most communities in the United States. It is an important inquiry because many expatriates leave the United States in part because they believe the cost of living in Mexico is materially less. In his third article, Karger compares the cost of utilities—water, electricity, gas, telephone and internet, in San Miguel de Allende and in Ft. Worth, Texas.

Comparing the cost of basic utilities would seem to be an easy task, but alas, even something as seemingly identical as electricity and gas are not always easy to compare. Unit costs are reasonably straightforward, but ultimate cost of any utility to a consumer depends on the quality of the service received and individual usage that is based on differing needs and choices. For purposes of this article, we compare the cost in San Miguel de Allende with the cost in Ft. Worth, Texas, of a kilowatt-hour of electricity, the cost of a gallon of water, a liter of LP gas, basic landline telephone service, and the cost of internet service.

Electricity

As with many services in Mexico, it is difficult to calculate the cost of electricity, if only because there is not one cost, but many costs depending on a variety of factors, some on escalating scales. In the case of electricity, how much one pays per kilowatt-hour in San Miguel depends on monthly usage, geographic location, time of year, what is determined by CFE (the one and only electric company) to be “high limit consumption” in this community, and the user’s average monthly consumption over the last year.

If one had unlimited time and patience, he could probably calculate his monthly electric bill using all of the factors CFE considers in assigning the monthly charge, but for purposes of a general comparison, I simply reviewed an electric bill from CFE for an 2,000 square foot home in San Miguel for the months of June and July 2007. The total kilowatt-hours used during those two months totaled 643. The CFE bill with taxes was 1,981.21 pesos, or a cost of 3.08 pesos per kilowatt-hour. Using a peso to dollar conversion rate of 10.5 to 1 (which I do throughout this article), that total cost was 29 cents per kilowatt-hour, inclusive of taxes.

Using Ft. Worth, Texas (zip code 76137) as this article’s comparison area, I found that electricity there ranges in cost from 9.3 cents to 14.3 cents per kilowatt hour, depending on which company from which one buys their electricity. Yes, there is a choice—102 choices to be exact offered by 27 different electric providers, the cost variance based mostly on the length of time, if any, a consumer wants to “lock in” the rate she pays per kilowatt hour of electricity. For example, it is currently possible to lock in a fixed rate of 11.9 cents per kilowatt-hour in Ft. Worth, Texas, if a homeowner is willing to make a 24-month commitment.

Bottom line: Competition lowers costs. Electricity, measured by cost per kilowatt-hour appears to be between 100 and 200 percent more costly in San Miguel de Allende than in Ft. Worth, Texas. It bears mentioning, however, that the cost per kilowatt-hour is only one side of the cost equation, the other being the number of kilowatt-hours used within a given billing period. Because air conditioning is rare in San Miguel, for at least the summer months the average user in Ft. Worth, Texas, in a similar sized home with air conditioning will substantially exceed 643-kilowatt hours in a two-month period. But, there are other costs harder to value. As those in San Miguel who have suffered the surges and brownouts can tell you, unless one’s home is equipped with both surge protectors and voltage regulators, certain appliances, computers, modems, and other equipment sensitive to varying voltage live a shorter life here than in areas where brownouts and surges are rare.

Water

Water in San Miguel is provided by SAPASMA. It is sold by the cubic meter rather than by the liter. There are 264.2 gallons in 1 cubic meter.

Using my most recent water bill as an example, we used 110 cubic meters of water (in the midst of construction) for which we were charged 1,571 pesos including sanitation and sewer. 110 cubic meters of water totals 29,062 gallons (over the course of 70 days). 1,571 pesos converts to US$149.61 dollars, making each gallon of water cost .5 US cents. 

Of course, like electricity, when it comes to water the base cost doesn’t tell the whole story. The water piped into San Miguel homes by SAPASMA is not drinkable (or at least not desirable for most to drink) without purification. The cost of either bottled water for drinking purposes or the cost of purification of the water provided by SAPASMA should be added to the cost of water in order to make a valid comparison.

At the home in Ft. Worth used for comparison, 2,900 gallons of drinkable water was billed at a base rate of 1.5 cents per gallon, or, if one adds the cost of handling the home’s wastewater and sanitation services, the cost was 3.2 cents per gallon.

Bottom line: Using raw numbers, including sewage treatment and sanitation, water is less expensive in San Miguel than in our comparative US city. However, if one considers the cost of water purification and/or bottled water alternatives and the fact that not all wastewater in San Miguel is treated before being released into the environment, the cost of water in San Miguel may be more expensive than it appears.

Gas (Liquid Propane)

On October 29, 2007, Noel Gas in San Miguel charged 5.19 pesos per liter of LP (liquid propane), or 49 US cents per liter.

In Ft. Worth, Texas, liquid propane, as of the same date liquid propane delivered cost US$2.26 per gallon, or 59 U.S. cents per liter (3.785 liters per gallon).

Bottom line: Few people in metropolitan areas of the US use liquid propane or butane. Natural gas is the most common alternative. Thus, it is difficult to compare liquid propane to natural gas if only because one is sold in liquid form by the liter and the other as a gas by the cubic foot and each have a different BTU rating. If one compares “apples to apples,” however, propane is approximately 17 percent less expensive in San Miguel than in our comparison city.

Telephone

Basic Tel-Mex landline service in San Miguel is 185 pesos a month, including the value added tax, or a total of US$17.61 per month. However, this cost covers only100 calls per month to other local landlines, with each additional call costing about 10 cents, and calls to cellular phones costing 30 cents per call or more, depending on length of conversation and number dialed. Long distance services from within Mexico are purported by some telecommunications observers to be some of the most expensive in the world. As voice over internet protocol (VoIP) telephone services have become prevalent, the cost of long distance, especially international long distance, from Mexico to other countries has dramatically dropped in price for those users who add VOIP as a function of their high speed internet.

A basic landline in Ft. Worth, Texas through AT&T is US$30 a month with unlimited local calling and 12 calling features such as call-waiting and call- forwarding. For US$40 a month, AT&T will provide that plus unlimited domestic long distance. VoIP such as Vonage and Packet8 are also available to anyone who has high-speed internet there as it is in San Miguel.

Bottom line: If you make less than 100 local telephone calls per month and do not call cell phones, the cost of basic land line telephone service is less expensive in San Miguel de Allende than in Ft. Worth, Texas. If, however, you want features, call cell phones, make more than 100 calls a month, or make long distance calls from your Tel-Mex landline, San Miguel will prove more expensive for telephone service than our comparison US city.

Internet

High speed internet in San Miguel is available via DSL through Tel-Mex and via cable modem through Cybermatsa. Prices are almost identical with 1 megabyte service running about 400 pesos a month (US$38) and 1.5 megabyte service costs 688 pesos a month (US$65.52).

In Ft. Worth, Texas, high-speed DSL internet service comes in 3 and 6-megabyte alternatives—the slowest alternative there being twice as fast as the quickest residential service offered by either Tel-Mex or Cybermatsa in San Miguel. The cost of high speed service continues to fall in the United States, and Ft. Worth is no exception, with 3 megabyte DSL service costing US$19.95 per month, and 6 megabyte service US$39.95 per month. Cable modem is available for US$29 a month for 3 megabyte service, US$39.95 a month for 5 megabytes, US$59 a month for 10 megabytes and a new 16 megabyte service was recently introduced for ultimate power users for US$80 a month.

Bottom line: Same as electricity. Internet service in San Miguel averages 100–400 percemt more than the cost of comparable service in the US city we use for comparison, using cost of megabytes per second as the comparative.

San Miguel was the hands-down winner when comparing cost of food (as reported in the first of this series of articles), but is more expensive when comparing the cost of electricity per kilowatt-hour, full-service telephone, and internet. San Miguel is less expensive for water and for liquid propane.

In two weeks, we will compare the cost of services—from maids to medical doctors.

Jim Karger is a resident of San Miguel and writes twice monthly for Atención. His next column will appear on November 23.