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Give gas: the failure of the electric company that makes our bill more expensive - voila! Of money


The conduct of the electric company, which drags its feet in the transition from coal to gas, costs billions and is one of the reasons for the 20% increase in two strokes, of the electricity rates

Our electricity bill: 9.6% in July, 8.2% in January.

For those who are still having trouble making it through the month, there is no chance of heating the apartment this coming winter (Photo: ShutterStock)

This afternoon the Electricity Authority will make a decision - how much will our electricity tariff increase in 2023, and will the price increase be at the rate of 8.2% as expected.

Along with the decision on the tariff increase, today the Authority's plenum will discuss two dramatic decisions concerning the electric company, where apparently, its foot-dragging and its failed conduct, with regard to the opening of the gas-fired electricity generation station, contributed to an increase of at least 4% in the price of the electricity bills that the citizens of Israel will pay from now on .

The Electric Company receives a lot of public criticism, but what apparently annoys the public, such as the high salaries and the cost of free electricity for the company's employee, amounting to NIS 10,000 per year, are at most a finger in the eye, but really not the big money that should worry us:

The manner in which the electric company has been conducting itself over the years, as also emerged from the State Comptroller's report published a few weeks ago, hurts the pockets of all of us from two directions: also in the amount of the electricity bill we pay each month and especially in its contribution to the cost of the animal.

Because when electricity becomes more expensive - everything becomes more expensive: production costs more, the price of inputs increases and we pay more for the products.

The last paragraph must be explained: the state auditor determined that the electric company is excessively delaying the transition from electricity production using gas - and as a result about 20% of electricity production in Israel is carried out when the raw material in the process is coal.

Beyond the air pollution as a result, this time it will also hurt all of us in the pocket: the increase in electricity rates is largely due to the rising coal prices.

If more production units had been converted to natural gas, for example, there would not have been any need to hurt our pockets like this.

With us at every moment - and at our expense.

This time the Electricity Authority decided to punish the Electric Company (Photo: ShutterStock)

The electric company will also pay dearly

This is the third time this year that the Electricity Authority has updated the electricity tariff, the previous one was at the end of July, when the price of electricity jumped by 9.6%, an unusual event that occurred because of the steep increase in the price of coal, when on normal days the tariff is updated once a year, in December.

The previous increase was supposed to be much sharper and reach a rate of 20%, but the cancellation of the excise tax on coal by Finance Minister Avigdor Lieberman and public pressure moderated it to half, while the authority stated that it intends to examine what is being done in the coming months to update it.

The total annual increase in the electricity rate is about 20%.

This time, the Electric Power Authority decided, as mentioned, to deal with the Electric Company as well and to cut 150 million shekels in headquarters expenses, which may lead to layoffs at the company's headquarters. The Authority also decided to reduce the Electric Company's profit, or what is known as the company's return, from 10.4% on equity, to 6.8%.

This means that the electricity company will earn less money, and about NIS 250 million will be returned to the public.

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Benjamin Netanyahu, the incoming prime minister.

He promised to lower electricity rates, but dragging his feet in forming the government and not appointing a new finance minister also has a price, which, at least for now, we will all pay (Photo: Reuven Castro)

What does the incoming government care?

One of the main election promises of the incoming government was to reduce the prices of electricity, water and property taxes, all of which are supposed to become more expensive next month.

The electricity tariff could have increased to a more moderate extent, but the order to cancel the excise tax, which was signed by the outgoing finance minister, will expire in February.

Since the government has not yet been sworn in and there is no certainty that the order will be extended, the Electricity Authority does not take into account the 2% reduction in the rate that consumers can earn as a result of the cancellation extension.

Here is the place to emphasize, that there is no "hijacking" of the Electricity Authority for a price increase before the inauguration of the government, but this is a procedure that is carried out every year at the end of December.

The global energy crisis affected fuel prices for electricity generation and the high cost of coal led to the first rate increase in July.

Since then coal has been significantly discounted, but the public's debt to the Electric Company swelled to NIS 4 billion, which had to be repaid.

Although the debt has been reduced since then, there is still a gap that needs to be filled.

Added to this is the increase in the exchange rate of the dollar against the shekel, an increase in the consumer price index and interest rate increases in Israel and around the world.

And here comes the part of the electric company.

Tamar Reservoir: The price of gas purchased by the Electric Company is significantly lower than the price of coal.

So why didn't they switch to gas?

The State Comptroller also asks (Photo: Walla! NEWS system, Tomer Applebaum)

We didn't give gas

According to the government's decision, the electric company was supposed to operate the gas-fired electricity generation station in June of this year, which was supposed to replace four coal-fired generation stations that were supposed to be closed.

The price of the gas that the electric company buys from the Tamar reservoir is significantly lower than the price of coal, which was supposed to lower the electricity production costs and reduce the tariff increase by at least half.

This joins the sharp criticism leveled by the State Comptroller in the report on the reform of the electricity sector, in which the State of Israel invested NIS 7 billion and not only failed, but the regulator did not bother to check whether it was implemented at all.

According to the report, half of the employees of the Electric Company earn over NIS 30,000 a month.

It is not for nothing that the Union of Chambers of Commerce issued a call: "Leave the menorahs on, because electricity is getting more expensive."

"There is no reason for the businesses and the public in Israel to pay out of their own pockets for the chaos in the electricity sector, the failures of the various governments and the conduct of the electricity company," says attorney Uriel Lin, chairman of the Association of Chambers of Commerce.

"Governance also means making sure that decisions concerning the electricity sector are carried out."

  • Of money


  • Electric Company

  • coal

  • Natural gas

  • Electricity Authority

  • electric bill

Source: walla

All business articles on 2022-12-21

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