IEC may cut W. Bank power over Palestinian debt

Palestinian Authority, energy supplier allegedly owe Israel Electric Corporation NIS 662m. in unpaid debts.

Electricity lines 390 (photo credit: Thinkstock/Imagebank)
Electricity lines 390
(photo credit: Thinkstock/Imagebank)
The Israel Electric Corporation has warned that it may perform intermittent West Bank power supply cuts due to NIS 662-million worth of unpaid debts from Palestinian electricity users.
Hisham Omari, CEO of the Jerusalem District Electricity Company (JDECO), said he received a letter from the IEC early on Tuesday afternoon, noting that his company alone owes the Israeli firm NIS 423 million.
Should the Palestinian energy supplier not comply, the IEC would implement scattered, temporary outages in areas within JDECO’s jurisdiction – such as east Jerusalem, Bethlehem, Ramallah and Jericho – as well as freeze the company’s assets in Jerusalem, Omari told The Jerusalem Post on Tuesday.
In addition, if the areas need an increased electricity supply or new, expanded transmission lines, the IEC would reject any such request, he explained, quoting the letter.
“Every year, we have an increase in consumption of 5- 10 percent, so we ask the Israeli company to increase its connections with us,” Omari said.
While NIS 432 million of the total NIS 662 million in debt comes from within JDECO’s supply region, the remaining NIS 239 million is from a combination of the Gaza Strip and areas in the northern and southern West Bank that fall outside JDECO’s realm and should come directly from the Palestinian Authority, an IEC spokeswoman told the Post.
For his company’s enormous debt, Omari largely blames both refugee camp residents who refuse to pay their electricity bills and government bodies that have likewise faltered on payments.
Within JDECO’s jurisdiction, there are about 12 refugee camps. Only about 5% of the residents of these camps actually pay their electricity bills, however, and “there is a big amount of electricity theft there and also in the villages,” according to Omari.
Electricity theft is particularly rampant in villages within Area C, where no Palestinian police force exists to patrol burglar activity, he explained.
Meanwhile, the PA itself owes JDECO NIS 120 million for electricity bills in various government buildings, schools, hospitals and water-pumping stations that it has failed to pay.
“They suffer financially – they are not in good shape,” Omari said. “Even this month, they are only paying 60% of the salaries to their employees. This means that all employees might not be able to pay electricity bills.”
Not only are the government bodies themselves not able to fulfill their financial obligations to JDECO, but the employees who work for them – now receiving fewer funds themselves – are also struggling to pay the bills in their own homes.
Aiming to solve the escalating financial quandary, on Monday night Palestinian Energy Authority chairman Omar Kittaneh spoke with IEC CEO Eli Glickman, who agreed to postpone all legal procedures surrounding the situation for two weeks, according to Omari. During this time period, however, the PA must figure out how a certain sum of money will be transferred to the IEC. After the two weeks, the parties will meet to determine exactly how to go about fixing the monthly payments in the future, Omari said.
The NIS 239-million debt that is outside JEDCO’s jurisdiction presents perhaps an even more complex challenge.
According to economic agreements between Israel and the PA, any income tax that Israel collects each month on behalf of the PA is supposed to be transferred to the authority at the end of that month, Omari explained.
Before transferring the total, though, Israel deducts allocations for electricity, water, treatment in Israeli hospitals and other Israeli services from the total it provides to the PA each month.
Monthly, the Israeli government transfers approximately NIS 55 million of this deduction to the IEC for Gazan and northern and southern West Bank electricity allowances, Omari said. Therefore, the residents themselves in these regions are never actually directly paying for their electricity use. In Gaza, while the Hamas government does also collect electricity bill fees from its citizens, the government uses the money for its own purposes rather than sending it to the PA Energy Authority, he explained. The entire Gaza Strip therefore essentially receives electricity “free of charge,” he said.
The JDECO region is exempt from these tax rules because the company – established by the Greek in 1914 – officially resides in both Jerusalem and Ramallah, Omari said, and therefore falls in both PA and Israeli jurisdictions. While JDECO cannot legally expand its jurisdiction, the PA has already begun creating new electricity companies to operate in the northern and southern West Bank, he added.
As far as bridging the financial gaps with the IEC goes, Omari said he holds the PA government predominantly responsible.
“If the Palestinian Authority will not transfer money, [the IEC is] serious in its letter, and maybe after two weeks we will see the electricity cut,” Omari said. “Hopefully, the PA will take the matter seriously.”
In response to the situation, the IEC reiterated to the Post that the combined debt of JDECO and the PA stands at over NIS 600 million.
“Regarding the financial condition of IEC, it cannot ignore such debts and therefore the company’s CEO has requested to examine all options in order to collect the debt,” an IEC spokeswoman said.
“So far no decision was made on the disconnections, but this is one of the options being considered.”
Numerous attempts by the Post throughout the day to reach the Palestinian Energy Authority chairman for comment went unanswered.