Energy and Water Minister Silvan Shalom pledged on Monday to launch a public committee to overhaul the electricity sector.

“The situation of the Israel Electric Corporation requires a thorough examination, so I will soon announce the establishment of a public committee to reform the IEC and the electricity sector in general,” Shalom said during a Knesset Finance Committee meeting.

He was addressing the committee at a review session of the Energy and Water Ministry’s budget, during which he stressed that the ministry has a relatively small budget.

Despite that, Shalom explained that the ministry acts as a regulator for all of the energy and water infrastructure in the country – from devices involved in a citizen’s everyday routine to natural gas discoveries, desalination, power plants and sewage infrastructure. The budget of the Energy and Water Ministry is NIS 216 million for 2013 and NIS 213m. for 2014.

“The Energy and Water Ministry is becoming a leader in lowering the cost of living,” Shalom said. “Desalination costs a lot and impacts the price of water. Yet amazingly, today Israel has no problem of a lack of water. In a short time we will reach a water surplus, and this will affect water prices in the future.”

Another segment of the energy and water sector that will continue to boost the Israeli economy will be the domestic transition to, as well as export of, natural gas, Shalom explained. With an increased use of natural gas, the government is already saving about NIS 1 billion monthly, an amount that will jump to NIS 3b. shortly.

Meanwhile, tariffs for electricity and water will decrease due to power and water facilities changing over to gas operation, Shalom added.

Turning back to the state of the IEC, Shalom stressed that the NIS 70b. debt of the company demands a thorough examination and overhaul of its operations. The committee he plans to launch will conduct negotiations with the company and employees, as well as work to implement its restructure, ensure financial stability and create competition in the industry.

Regarding the large amount Palestinians owe the IEC, Shalom said he and his colleagues are “examining the possibilities for debt collection, despite the fact that debt collection in the electricity sector from the Palestinians was not included in the economic portion of the Oslo agreement.”

The debt is growing every month and has grown to more than NIS 800m., he explained.

Adir Hermon, vice president of the Renewable Energy Association of Israel, emphasized the importance of focusing on renewables to improve the economy.

“Electricity generation from renewable energy is already economic and would be worthwhile for the State of Israel,” Hermon said.

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