Following the publication in "Israel Hayom", this week the President of the Association of Manufacturers, Dr. Ron Tomer, sent a letter to the new Chairman of the Electricity Authority, Amir Shavit, requesting to prevent an increase in the electricity tariff and an inflationary spiral.
Currently, the Electricity Authority's November input indicators indicate an apparent increase of 12% in the electricity tariff, following the increase in the price of coal, the increase in the consumer price index and the increase in the dollar exchange rate.
The electricity rates are updated once a year during January by the Authority, but when there are sharp fluctuations - there may be updates even in the middle of the year.
As you may recall, on August 1st the electricity tariff increased by 8.6% following the spike in the price of coal.
The rate of price increase was supposed to be higher and stand at almost 20%, but in the shadow of public criticism it was decided to distribute part of the price increase to payments.
Since the beginning of the year, electricity prices in Israel have increased by more than 12%.
"In recent weeks, there have been increasing reports in the media about the Authority's intention to make another update in the electricity tariff towards the end of this year, in addition to the 8.6% update that was made last August," writes Tomer.
Dr. Ron Tomer, President of the Manufacturers Association, photo: Yossi Aloni
"At the hearing held in July, the Authority explicitly stated that there is no intention to make another update to the tariff, and that the spread of the costs that was carried out will make it possible to avoid a further increase in the tariff. Also, even if there are changes of some kind in the electricity sector, and especially in the costs of coal - these trends may change faster than expected , and to increase the expected price increases".
The property tax price will increase
Tomer mentions that at the hearing the manufacturers' association made several proposals, with the aim of preventing further price increases: financial recognition of the expected income from the sale of the "Eshkol" power plant;
Distribution of the excess costs of the increase in the price of coal until 2030, in light of the expected cessation of the use of coal;
and examining the use of natural gas royalties, currently embodied in the electricity tariff, for the purpose of reducing the tariff until coal prices stabilize.
Tomer emphasized in his letter that the Electricity Authority has a heavy responsibility to prevent a sharp increase in tariffs, which will have negative effects on the entire economy.
"A drastic increase in electricity rates is expected to be a significant link in the chain of price increases - from fuel prices to the increase in property tax rates. These increases are reflected in production costs, thus severely damaging the Israeli economy. In practice, the increase in electricity rates is expected to lead to an additional cost of more than NIS 3.5 billion in total the consumers," he wrote.
It is further explained in Tomer's application that the water and sewer rates are affected by the electricity rates.
"Therefore, we are expected to experience an increase in water and sewer rates as early as the next rate update (January 1). An unprecedented increase in electricity rates is expected to snowball, and will harm all citizens of the country directly and indirectly. I urge you to respect the Authority's announcement from July, and refrain from any Through another increase in the current electricity tariff," concluded Tomer.
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