Manufacturers shocked by planned 19% hike in electricity

Mul-T-Lock CEO warns it might be forced to move operations abroad.

July 17, 2011 23:34
2 minute read.
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Light bulb 311 (R). (photo credit: REUTERS/Ina Fassbender)


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Manufacturers reacted angrily on Sunday to the Public Utilities Authority’s announcement that it will raise electricity rates by as much as 19.11 percent, subject to a public hearing.

The authority made its announcement following an emergency session late last Thursday and called on the government to do everything it could to prevent such an increase. It said the price of electricity would rise by just 12% if the government lowers the fuel excise and cancels an Environmental Protection Ministry order prohibiting the use of heavy jet-fuel oil.

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Ya’acov Rosenberg, the chairman of Nazareth Illit-based RH Technologies, whose factories employ more than 900 people, warned the government that “an increase in the price of electricity will lead to workers being laid off.”

RH Technology “pays NIS 600,000 in electricity bills each month,” he said.

“An increase such as this will mean paying an addition NIS 120,000. Since the factory has already been hit hard by the low dollar exchange rate and the increase in the price of fuel and heavy jet-fuel oil, how does the government expect that manufacturers like us can afford an additional expense like this?” Mul-T-Lock CEO Alon Lombruzo said it was becoming increasingly difficult for his company to manufacture its products in Israel and warned that it might be forced to move its operations abroad.

“A production plant like that of Mul- T-Lock, which is the biggest manufacturer of security and locking products in Israel, will find it hard to deal with an expense of more than NIS 200,000 per month,” he said. “I hope that the government will give thought to stopping this damage from being done to Israeli manufacturers, otherwise those same manufacturers will have to search for alternatives overseas.”

At its weekly cabinet meeting on Sunday, the government approved a long-range plan to promote the production of electricity from renewable nonpolluting sources. It said the goal of the plan is to reduce surplus costs for consumers, reduce gas emissions and air pollution by the electricity industry, and ensure long-term sources of energy for Israel.

The decision, which was formulated by Prime Minister Binyamin Netanyahu and the National Economics Council in cooperation with the National Infrastructures and Environmental Protection ministries, set a goal for electricity generation from renewable sources of 2,760 megawatts by the end of 2020, constituting 10% of electricity production in Israel. An interim target of 1,550 MW by the end of 2014 was also set.

Also Sunday, Federation of Israeli Chambers of Commerce president Uriel Lynn called on the government to implement a five-point plan to reform the electricity industry, including returning to the energy-saving policies of the 1980s and removing bureaucratic barriers to gas exploration.

Lynn, a former National Infrastructures Ministry director-general, also recommended that the Israel Electric Corporation be reorganized and be granted a 10-year loan to cover the excess amount it will have to pay for the increase in the fuel excise. He said the Environmental Protection Ministry must relax its opposition to the use by manufacturers of heavy jet-fuel oil.

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