Electricity tariffs in Israel to remain unchanged, will drop in 2015

Public Utility Authority prepping for an emergency natural gas shortage situation.

electricity line old370 (photo credit: Marc Israel Sellem)
electricity line old370
(photo credit: Marc Israel Sellem)
Although electricity tariff rates are to remain unchanged for 2014, Public Utility Authority officials stressed that they plan to reduce rates for 2015.
Citing forecasts conducting by professional organizations, the PUA said that at the end of the year, consumer tariffs in the electricity sector will likely drop significantly. The decision to maintain the current electricity tariff for now overrides an original expectation that the rates would need to increase, due to the fuel debt of the Israel Electric Corporation, according to the PUA.
“This move will bring tariff reductions and decrease the burden on consumers,” said National Infrastructure, Energy and Water Minister Silvan Shalom. “This will help an important goal – lowering the cost of living in Israel and lowering prices of many products, which will relieve the Israeli public.”
When the Egyptian gas supply to Israel ceased in 2012 and prior to the connection of Israel’s own gas provisions in March 2013, the IEC was forced to use expensive fuels instead, at an estimated cost of NIS 9 billion, the PUA said.
This crisis was then reflected in the electricity tariffs paid by Israeli customers, the authority added. A first tariff increase of 8.9 percent occurred in March 2012, followed by a second tariff increase of 5.5%.
The IEC’s outstanding fuel debt remains about NIS 3b., but the PUA has calculated that there is no need to further raise the public electricity tariffs.
Meanwhile, although Israel’s natural gas crisis has been over since the commencement of flow from the country’s Tamar reservoir in March 2013, PUA officials said on Tuesday that they are prepping for an emergency natural gas shortage situation.
PUA plenum chairwoman Orit Farkash-Hacohen instructed private power suppliers on Monday to be ready to provide electricity to the national grid if a shortage in supply occurs, the authority said.
Under the arrangement, if a future disruption occurs in the natural gas supply sector, private producers will be required, upon request, to redirect the output of their facilities for the benefit of the nation, the PUA stressed.
Should such a disruption occur, the IEC would allow private power producers to use natural gas allotted for its use, while the company would transfer to backup fuels.
“The PUA regulates national energy production in cases of future gas supply crisis, through the entrance of independent power producers into the market,” a statement from the authority said. “Due to the lack of redundancy in the gas sector today, along with existence of power plants in sector operating on gas only, future disruptions in the Israeli gas sector are likely to cause these stations to be unable to operate during periods of gas sector crisis, and as a result create electricity supply problems.”