An Electric Shock

Will we be fortunate enough to make it through the summer safe and sound? Are we in for more power outages like the one we experienced early last week?

Will we be fortunate enough to make it through the summer safe and sound? Are we in for more power outages like the one we experienced early last week?

If you ask Israel Electric Corporation CEO Uri Ben Nun, you'll get a particularly worrying response: "We could run into problems in July and August; it will take a lot of luck to make it through the summer without mishaps," he says.

So what are we supposed to do - pray for a miracle? Is there no management? No planning? Isn't there a huge monopoly with 13,000 employees?

Presumably, Ben Nun knows exactly what he is talking about. The interim report (yet to be published) of the committee that is looking into the reasons for the power outages last week comes up with a particularly scandalous finding. Apparently, the recent power outages were not something out of the ordinary, and last week's incident "occured on the backdrop of 60 [!] similar incidents that took place in 2005, when the system was in the exact same state it was in on the morning of Sunday, June 4, 2006... Fortunately, the previous incidents did not culminate in power outages for customers."

In the very diplomatic language of the committee, this constitutes a very severe indictment of the IEC management.

This is a company that gambled on the supply of electricity to elevators, traffic lights, industry and and the hotel business 60 times during the course of 2005, for 6.4 hours on average - and failed to draw any conclusions on the matter. Until at one point, last week, its luck ran out, and it all blew up in its face.

Every one of the 60 incidents is classified as "a state of risk" - namely, a situation in which supply exceeds demand by no more than 500 megawatts. At such a critical point, if a single large unit (Rutenberg in Ashkelon or Orot Rabin in Hadera) crashes due to a fault, the IEC has to immediately initiate power outages.

Ben Nun and the chairman of the workers' committee, Mico Tsarfati, want to solve the problem by building another big power station at a cost of $1.5 billion. But even without such an expense, the IEC is carrying a huge debt of NIS 45 billion; and in any event, the problem is not a lack of production capacity but rather amateurish management that fails to utilize the resources at its disposal.

The panel investigating the outages revealed that two new power stations - Alon-Tavor (350 megawatts) and Gezer (250 megawatts) - have not been working at all for the past six months as a result of "issues relating to the granting of production licenses." The workers' committee is opposed to the operation of the stations, which, if working, would prevent the power outages. The panel also found that 25 percent of the power stations were undergoing maintenance work and renovations in June, with the summer already going strong. These two shortcomings led to the "state of risk" that, in turn, led to the scandalous power outages.

It is astounding to reveal that the IEC has never tried to use financial incentives to flatten the demand curve. It could have done so very easily - had it announced on Sunday of last week that from 7 P.M., the price of electricity will drop by 50 percent. Many households would wait until evening before doing their laundry washing and drying, and large factories would perform energy-intensive operations at night.

The IEC also fails to grant large factories discounts in return for the option of cutting their power supply during peak-demand times - despite the fact that such factories have large generators for emergencies. In addition, the thousands of generators that exist in the country could be incorporated into the electricity supply system.

None of this was done.

The ball is now in the court of National Infrastructures Minister Binyamin Ben-Eliezer. Will he support the reform of the electricity sector that was legislated by the Knesset? Will he be in favor of splitting up the IEC and introducing real competition when it comes to the distribution and production of electricity - Rutenberg versus Orot Rabin, for example? Will he help private producers to set up power stations?

The current Ben-Eliezer is an improvement on the pre-primaries Ben-Eliezer, who was the lackey of the large workers' committee. He talks differently - and the workers' committees are concerned. The coming year will show whether it is all hot air, or if he really means business - for the good of the citizens of Israel.