Following the Electricity Authority's recommendation for a regular update of electricity tariffs for consumers for 2022, the tariff for domestic consumers is expected to rise by 9.6% as early as August.
Will the electricity tariff finally rise on August 1?
The decision of the Electricity Authority, which sets the electricity tariff in the economy, was published for a public hearing for a period of two weeks, in order to receive the public's comments.
Is there a chance that the decision will change?
Yes.
The Manufacturers' Association has already said that it will demand at the hearing that the price increase be halved, so that the electricity bill will increase at a more moderate rate of 4% -5%, by spreading the increase over a longer period than the Electricity Authority decided on.
An addition of NIS 385 on average to the annual account, Photo: Dudu Greenspan
How much will it cost us?
The average consumption in Israel currently stands at about 8,000 kWh per year, so the average electricity bill per year is about NIS 4,000. Raising the tariff by 9.6% will add about NIS 385 to the total annual payment.
Why is the price of electricity rising?
The rise in the price of electricity is due to the exacerbation of the global energy crisis and the continuous and sharp rise in coal prices.
In recent months, coal prices have soared by more than 140% compared to the price on which the tariff update was based at the beginning of the year.
In addition, other indices that affect the cost have risen, such as the exchange rate and the consumer price index.
Can the government put pressure on the Electricity Authority?
No.
The Electricity Authority is an independent body and the government cannot interfere in its decisions, even though the authority's plenum consists of professional representatives from the Ministries of Energy and Finance.
The Treasury may decide to reduce the excise tax on coal, but already a few months ago it was reduced to a level close to zero.
If so, what options does the government have?
The obvious step, of course, is to reduce the VAT on electricity consumption, which currently stands at 17%.
The Ministry of Finance is also currently examining what can be done in the current situation, since there are several sources for the discount budget.
The only way that seems reasonable at this point is to ask the Electricity Authority in the near future for a longer-term deployment of the hacker.
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