The plenum of the PA agreed that the increase in tariffs is required due to the increase in the price of coal in the world, but instead of an increase of at least 15% as required, the company will increase by less than 10% | The current rise joins the rise in prices of water, bread, milk, eggs and fuel prices
The plenum of the Electricity Authority decided to raise the electricity tariffs for domestic consumers of the IEC by about 9%. The members of the plenum of the PA agreed that the increase in tariffs is required due to the increase in the price of coal in the world to about $ 350 per ton, mainly following the war in Ukraine.An official announcement of the move is expected to be delivered to the public early next week, after the Authority completes the final calculations.
Originally, the electricity tariff was supposed to jump by about 15% following a sharp jump of more than 160% in the price of coal since the last tariff was updated, but the plenum of the PA decided to spread the increase so that it will be paid by 2026 and the rate will jump.
The increase in tariffs is supposed to reflect the costs of electricity production by the IEC, of which about 45% of its fuel basket is still based on coal, 53% of it on natural gas and the rest on other fuels. Since the outbreak of the war between Russia and Ukraine last February, the price of a ton of coal has jumped by 175%, so that last May the IEC paid about NIS 1,050 for every ton of coal it consumed in the electricity production process.
According to a report by the Knesset Research and Information Center, which deals with the impact of the global energy crisis on Israel, closing the two coal-fired production units at the Orot Rabin power plant in Hadera and converting them to natural gas production would reduce electricity tariffs by 4%. The coal-fired production units in Hadera were caused by the eruption of the corona, which led to ongoing disruptions in the arrival of new turbines and the brackets that the American manufacturer made for some of the components installed in them – due to defects.
According to the original plans, the first turbine at the Hadera station should have started generating electricity as early as last month. The current forecast for gas operation is April 2023 and the second gas turbine operation is expected in January 2024. According to the Knesset Research and Information Center, the postponement of the closure of the Hadera coal units means an addition of 2.3 million tons of coal that the IEC will have to burn during 2022 and 2023. The IEC is expected to stop consuming coal for electricity production by the end of 2025, when it also completes the conversion of the 4 coal production units at the Rotenberg power plant in Ashkelon from coal to gas.
The increase in the price of electricity joins the increase in the price of eggs this morning by 6.5% and the increase in the price of water, which rose last Friday and stands at NIS 7.6 per cubic meter, compared to NIS 7.5 in January. An increase of 36 cents from the previous month. An additional full service surcharge will be 21 cents per liter as in the previous month.
Not only have prices gone up, but following inflation, our money is worth less. This week, the Bank of Israel’s Monetary Committee decided to raise the interest rate for the third time in a row to 1.25%, an increase of half a percent. During this period, the Bank is trying to curb inflation, which reached 4.1% in May, beyond the maximum target range set at 3%.