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The Public Utilities Authority on Thursday denied the Israel Electric Company its requested 10-15 percent rate increase, recommending instead that electric prices rise 5% on September 1.
The Authority noted in its statement, however, that this was only a recommendation and that a final decision would not be made until a public hearing, expected late next week. Also, by November, the IEC must present to the Authority a plan as to how it intends to operate more efficiently.
In its official response, the IEC said it had not yet studied the decision sufficiently to accept or reject it.
IEC representatives met with the Public Service Authority on Wednesday to make its case to raise prices for both home and commercial customers.
Uriel Lynn, president of the Federation of Israeli Chambers of Commerce, said the IEC went too far in seeking a rate hike of 10% but was pleased with the decision.
"I think that 5% reflects a judicious decision and one that fairly represents the rise in oil," Lynn said. He noted, however that none of this additional money should be used to increase salaries of IEC employees, which he said already are among the highest in the country.
The Manufacturers Association of Israel, however, claimed that any raise in electricity prices would have a drastic effect on factory owners and seriously damage the competitive standing of the country's manufacturers.
"Manufacturers are going to have pay at least an additional NIS 180 million in electricity costs, based on costs from this year when they paid some NIS 3.6 billion in electricity bills," said Moshe Cohen, chairman of Association's energy committee. "Currently some 50 factories are paying more than NIS 20m. a year in electricity bills - an additional 5% is going to not allow them to compete with lower prices of manufacturers from around the world."
Shraga Brosh, president of the Association, said the 5% hike was too high and criticized the Authority's decision to make customers pay for what he called the IEC's financial shortcomings.
"We aren't supposed to give them money - if the company needs loans, then it should go to the owner, not to the customers. We will express our reactions to this decision at next week's hearing."