Government to Vote on Controversial Electricity Reform Sunday

The plan would loosen the grip the Israel Electric Corporation has over power generation –a goal that has eluded governments for more than two decades

Israel Electric Corporation facilities in Hadera, northern Israel, August 2017
Yossi Weiss/Israel Electric Corporation

The controversial plan for reforming the electricity sector is scheduled to go the cabinet for approval on Sunday, unless opposition from coalition lawmakers over the weekend proves powerful enough to block or delay it.

The plan, which was reached in negotiations between the government, labor unions and the state-owned Israel Electric Corporation completed in December, would loosen the grip the IEC has over power generation –a goal that has eluded governments for more than two decades.

But the plan doesn’t hold the utility to a strict timetable and preserves it monopoly in transmission and distribution.

But the element that has aroused the most controversy call for the estimated 7 billion shekel ($2 billion) cost over eight years will be paid for by not lowering electricity rates even as IEC is cutting costs under the reform program.

MK Bezalel Smotrich (Habayit Hayehudi) and many other coalition legislators reject the idea that the public should be covering the cost of the reform, especially as 6.4 billion shekels of the cost will be for enhanced severance pay and pension benefits for IEC employees.