"Only 4.9%": This is how an inflated electricity bill is sold to the public

How do you sell the public a raise in electricity tariffs?

First we update the price by 4.9% (not to say 5), then explain that the increase had to be much sharper (so that we feel we went out cheaply) and finally publish the multi-year rate (so that we understand that it once cost us more).

Energy Server: "Hard News"

Walla!

Of money

21/12/2021

Tuesday, 21 December 2021, 12:42 Updated: 13:32

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The discourse on the cost of living and price increases in the economy has made quite a few headlines, but in content, it is quite amazing that the Electricity Authority's announcement of a 4.9% increase in tariffs, starting on February 1, 2022 (subject to a hearing), passed relatively quietly.

By and large, this is a huge marketing success for the Electricity Authority, which wrapped the bitter pill in a rustling cellophane wrapper, but first of all, we will mention that the sharp rise in electricity tariffs is not only reflected in the bi-monthly bill that each consumer receives for home consumption.

The rise in electricity tariffs is in fact an invitation to a sweeping price increase in the economy, since electricity expenses are not just private, and so a business owner who pays, starting in five weeks, about 5% more for the electricity he needs, will - most likely - roll up the price to customers. We all.

So how did it happen that between the discourse on the "Carmel" storm and the Zadorov trial, there was almost no protest over the dramatic announcement?

For this, thanks are due to the wording (even if mostly correct) of the language of the message.

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Hagit East Power Station.

According to the announcement, the profits from its sale will reduce the price increase (Photo: Reuven Castro, Reuven Castro)

According to the Electricity Authority, the main reason for the increase in the tariff is the global coal price, which has risen by more than 100% over the past year.

"Currently," the authority said in a statement, "about 23% of total economic production is made using coal. However, starting in the coming year, the rate of coal production is expected to decrease gradually until the complete cessation of its routine use, in 2026. The tariff for 2022, therefore embodies "There has already been a 20% reduction in the amount of coal used to generate electricity compared to the consumption of coal in the past year."

The Electricity Authority explains that the effect of the rise in coal prices has moderated due to the fall in the dollar exchange rate, but in total has led to an increase of about 11% in the cost of selling for the purpose of calculating the tariff. The rise in the consumer price index and an increase in the amount of renewable energy integrated into the economy have led to a further rise in selling costs.

However, the Authority notes: "A number of factors led to a moderation in the increase in the electricity tariff, including the profits from the sale of the Hagit East power plant, which will be transferred in full to electricity consumers as part of the current tariff update." At the dollar rate. "

At the end of the announcement, readers are presented with a graph of fluctuations in electricity tariffs, which shows that although the tariff for 2022 is expected to be one of the most expensive in the last decade, here and there we were already in his grandmother, and in 2017 we even passed it.

Coal for industry, the main "culprit" in rising prices (Photo: ShutterStock)

Is it true "we went out cheap"?

The reasonable reader felt that they had actually "done him a favor": with such a steep rise in the price of coal, which was supposed to cause an 11% increase, were we finally left with only less than half the amount?

Dayano.

Moreover, the increase is not even 5% but "only" 4.9%, perhaps the oldest retail trick in the world, like a price tag of 9.99 on a product.

At the end of course they make it clear to us that things have never been this way, here - five years ago we paid more for electricity.

It will be immediately said that these are legitimate marketing exercises, when carried out by a private entity, but when it comes to a non-profit statutory and public authority, it is a little harder to understand why the worders of the post went out of their way to give us the feeling that we came out "cheap"?

Karin Elharar, Minister of Communications: "Unfortunately I do not set the price" (Photo: Reuven Castro)

The Minister of Energy: "The hard news for every home in Israel"

Energy Minister Karin Elharar said in response to a statement from the Electricity Authority:

"Unfortunately, I have no capacity to influence electricity or water tariffs set by independent authorities. After coal prices, which account for about 20% of electricity production, jumped more than 100% this year "It was possible to prevent an increase in the price of electricity. Of course, such an increase is a difficult line for every home in Israel, but a much higher increase was prevented due to the fact that Israel is weaned from coal, the shekel is strengthened and the Hagit power plant is sold."

• Of money

Tags

• IEC

• Electricity prices

• electric bill

• coal

• Natural gas

• Karin Elharar