Government raises electricity rates by 10%

The planned 20% hike has been halved after permission was given to use fuel oil, taxes on diesel were lowered.

By GLOBES CORRESPONDENT
August 8, 2011 11:23
1 minute read.
Haifa bay power plant

Haifa bay power plant 311. (photo credit: Ariel Jerozolimski)

 
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Electricity rose 10% Monday after the Israel Electric Corporation (IEC) received permission Sunday night from the Environmental Protection Ministry, following a request from the Finance Ministry, to operate two out of its six units using fuel oil.

The Public Utilities Authority (Electricity) had originally called for a 20% hike in electricity rates today due to disruptions in the supply of Egyptian natural gas, and the rise of fuel prices on global markets.


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The rise was cut, however, by 8% after Finance Minister Yuval Steinitz lowered excise and purchase tax on diesel last night. On Monday, the hike was cut a further 2%.

The Environmental Protection Ministry has banned use of fuel oil for electricity production because of the high level of air pollution it causes. In March, Environmental Protection Minster Gilad Erdan allowed the IEC to use fuel oil for 12 hours after a breakdown in the natural gas pipeline from the Yam Tethys field.

At the time, Erdan said, "There will be no more open checks to pollute the environment just because it is a cheaper way to produce electricity."

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