Last update - 00:00 12/01/2007
New bill would give discounted electricity to poor families
By Ruth Sinai, Haaretz Correspondent
The Israel Electric Corporation (IEC) has agreed to institute lower
rates for low-income households. About a quarter of the discounts will be
funded initially by IEC workers who agree to give up a percentage of the
electricity they receive at no charge. The rest will apparently come from the IEC. No funding will come from government sources.
The agreement comes out of talks between the chair of the Knesset Economics Committee, Moshe Kahlon (Likud), and IEC deputy director Avner Yehudai.
Kahlon, with the support of Infrastructures Minister Benjamin Ben-Eliezer, will be pushing ahead a bill he submitted last year on electricity discounts for lower-income households. The law would authorize the Electricity Authority to set lower rates. "I can't imagine that the government would oppose such a law, especially in light of the welcome cooperation between the Infrastructures Ministry and the IEC," Kahlon said.
Kahlon and Yehudai agreed that the legislation should proceed quickly. As a first stage, Kahlon will ask the National Insurance Institute for data on recipients of income supplements, in order to estimate the cost and extent of the discounts. The IEC will grant graduated discounts, with the lowest rates going to households that consume the least amount of electricity. The IEC proposed a model used in other countries in which wealthier customers subsidize needier ones, which Kahlon rejected.
Tariff discounts on electricity exist in a number of Western countries. Italy has differential tariffs based on health, income and age. The United Kingdom has pledged to abolish by 2016 what are known there as the "fuel poor," defined as those in households that spend more than 10 percent of their income on energy. To reach that goal, one plan is to provide fuel at a lower cost to a lower-income household to heat one area of the home, and to spread the payments over the year. In the U.S., federal and local governments, power companies and community organizations are funding energy-assistance programs for the poor, including the cost of home insulation.
The IEC has been studying the matter in recent years, especially in light of the number of households owing money and the more than 100,000 customers whose service it cuts off annually due to unpaid bills. The decision to adopt a social policy on electricity has PR value as well: Cutting off needy members of the public is bad for the IEC's image.