Electricity prices will decrease by 2%, following the 1.5% decrease last month, but this comes after electricity prices jumped by almost 20% in the last year. The Electricity Authority is now reporting on the publication of a public hearing to update the electricity price tariff for the consumer, in light of the sharp drop in coal prices and the stabilization of prices in the last two months.
According to the wording of the hearing, “the macroeconomic price environment is unstable” when the main concern is the instability of the exchange rate (dollar rate), and the price index, when inflation does not stop for the time being and has reached 5.4%. The increase, as well as “risks arising from it”, partially offset the decrease in international coal prices. The lowering of the excise tax by the government also helped the decision to lower the prices.
As you may recall, recently Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich announced a plan to stop the ‘inflation generators’ and they also announced a sharp reduction in electricity prices. So far it hasn’t really happened yet. They talked about stopping most of the recent increase (of 8%) so that there would be an increase of 2.5% instead of 8%. In the meantime, prices have risen and the discount has been made much less.
What was behind their statement was the tender for the sale of the Eshkol power station. The tender that is expected to take place later this year will bring billions of shekels into the state coffers, and the question is whether the state will receive a premium over and above the actual cost of the facility. If there is a significant premium, it will be able to ‘return’ the money to the public by lowering electricity prices. Of course, this is not a long-term change, but a certain paracetamol for the recent price increase.
However, it is also worth mentioning that prices in Israel are low compared to the rest of the world, here is an international comparison:
Who else is to blame for the high prices? The Ministry of Environmental Protection and the Electric Company
At the beginning of the year, the Electricity Authority pointed to the Ministry of Environmental Protection as a problematic factor because of which the prices cannot decrease, alongside the well-known problems of the Electric Company: “Other factors that led to the increase in the tariff are a delay in the construction of the gas-fired power plants that will allow the closing of the polluting coal plants (1-4) in Orot Rabin A delay in the project to convert the rest of the coal-fired units from coal-fired generation to gas-fired generation and the failure to grant approval for additional production hours due to the emission permit issued by the Ministry of Environmental Protection for units 6-9 at the Eshkol site of the Electric Company.
Comments to the article(0):
Your response has been received and will be published subject to the system policy.
Thanks.
for a new comment
Your response was not sent due to a communication problem, please try again.
Return to comment