The rate for domestic consumers is expected to increase by about 8.2%. The tariff is expected to enter into force on January 1, 2023, after a final decision has been made.
In light of the global energy crisis which significantly affected fuel prices to generate electricity.
The high cost of coal caused an increase in electricity rates in 2022, and high costs are expected in 2023 as well. Coal prices are significantly higher than the tariff recognition that existed until now.
Along with the increase in coal prices, there are other factors that led to the increase in the electricity rate: a delay in the construction of the gas-fired power plants that will allow the closing of the polluting coal-fired plants (1-4) in Orot Rabin;
delay in the project to convert the rest of the coal units from coal generation to gas generation;
Failure to grant approval for additional production hours due to the emission permit issued by the Ministry of Environmental Protection for units 6-9 at the Eshkol site of the Electric Company; a sharp increase in the dollar exchange rate; a continuous increase in the consumer price index; and interest rate increases in Israel and around the world.
The price in Israel is still one of the lowest in the world, chimneys in the UK, photo: Getty
In order to moderate the rate increase as much as possible, the Electricity Authority worked together with the system manager (Nega Company) to reduce the use of coal projected for 2023 by changing the operating instructions of the coal-fired units.
In addition, the authority published a hearing to determine a new production base for the electric company in which the financing methodology of the electric company's production segment was revised and the cost of this segment for consumers was reduced.
The new methodology includes reducing the rate of return on capital of the Electric Company and reducing the overheads of the company's headquarters and management.
The authority also decided to retire the debt created due to the sharp increase in the cost of coal in 2022 for three years, with the cautious assumption that it will be possible to end the use of coal for the majority of the year at the end of three years.
In these moves, the Authority balanced between the need to maintain the financial stability of the electricity sector and the mitigation of the impact on consumers in the sector.
Another major change implemented with the current electricity tariff update is the change in the demand clusters (Mashabim) in accordance with the Authority's decision published in July 2022. The purpose of the change is to adjust the structure of the hourly rates to the structure of the economy, which includes production with renewable energies in percentages that increase from year to year.
Implementation of the decision on changing the hourly clusters The demand and the pricing of the rates in accordance with the published model, help to incentivize smart consumption, in a way that will allow consumers to divert their consumption from peak hours and thus lower the cost of electricity in the future, as well as help promote a transition to the use of renewable energies and energy storage.
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