The Electric Corp Workers Won

When elevators grind to a halt and cars collide because traffic lights stop working, it is hard to laud the technological accomplishment of the Israel Electric Corporation. But in fact, we should, because whatever you may think after the brown-outs plaguing Israel this week, the IEC is in no way behind the times.

On the contrary: the IEC is one of the most advanced electricity utilities in the world. Like other electric companies, it measures itself in terms of the number of minutes in which it fails to supply power (average per customer) each year. The last figure is 150 minutes in the year.

That attests to a dramatic improvement in terms of power outages in recent years. It is also excellent compared with the average in other countries.

Five years ago, a comparison placed Israel's IEC in the top third of power providers in the West, in terms of power cuts. Since then its status has only improved.

In fact the IEC can barely remember the last time (until this week) it was forced to impose power cuts because it didn't have the capacity to supply demand. Apparently it's been at least eight years since the last time. In the U.S. it happened time and again in the last five years, in California and New York, too.

It is no coincidence that the IEC is so advanced, by western standards too. It is no coincidence, and though it's lousy to be stuck in an elevator or without air conditioning on a hot day, the truth is that its very achievements are a problem. Why? Because the power sector has advanced at the expense of other equally crucial infrastructures, such as sewage, roads and the trains.

Israel is a leader in western terms in power. But in other infrastructures, it's at the other end of the scale. That gap demonstrates the sheer power of the IEC, the power of the company and of its union, which have the clout to cow policy makers. That is why the IEC has had the wherewithal to make tremendous investments in infrastructure, while other sectors lag and languish.

With extraordinary timing, the brown-outs this week coincide with the peak in debate over further investment in the power infrastructure.

Just as the new chairman of the IEC, Shlomo Rothman, meant to halt investment in development and in building new power stations, whoops! The grid collapses.

The future of $1.5 billion, which is the cost of building a new coal-firing power station and employing 5,000 workers (40% of the company's staff) to plan, build and operate the station, juxtapose with stuck elevators, blinded traffic lights and screaming headlines in the papers.

There is naturally no connection between these things. But Israel's people received a live demonstration of what could happen if the power grid can't keep growing and growing, and if new stations don't get built.

The demonstration, whether deliberate or not, was effective. Though it still fires crude instead of using clean natural gas, the Reading power station in Tel Aviv was reconnected to the national grid, but that's a small price (what's a few more weeks of foul smog in Tel Aviv between friends). It's also a small achievement: Reading has all of 200 employees.

The real war is over the future of 5,000 employees, and the only way to justify their continued employment is to build more and more and more stations.

The IEC is already building eight more stations, small ones that will operate on natural gas, that are designed to increase its capacity by 30% by the year 2008.

But that is not enough. The IEC workers want to build more stations after 2008, even though by that point, electricity production should be 25% above peak estimated demand. Mainly, the IEC workers want to build more coal-fueled power stations, at a cost of $1.5 billion each, because each  would employ hundreds and hundreds of them.

Chairman Rothman knows that he mustn't waste $1.5 billion on a station that is not needed. He knows that far better use could be made of that money. But Rothman is facing the Union, and the Union's warnings that without more power stations, then motionless elevators and dead traffic lights will become the norm.

The union is exaggerating, of course, but it's right that a more frugal electricity system is also a system in which there may be  more power cuts.

Economists claim that the risk is remote, and that in any case, more hours spent without air conditioning in the brutal heat of July and August is a reasonable price to pay to save $1.5 billion. The public may not agree, though, judging by the howling this week.  Which means: the IEC workers have won.