Electricity rates for homes will go down 6.2% starting next Sunday, the eve of the Rosh Hashanah holiday, the Electricity Authority decided on Monday in the second such drop this year after a 10% reduction in February.
Power rates of 53.9 agorot (14 cents) per kilowatt hour will drop to 53.4 agorot, the authority said. When the government’s plan to shave one percentage point off the value-added tax goes into effect after October 1, rates will fall even further. The authority said the reduction would save the average family 300 shekels a year.
Overall rates, which include those for industrial and public sector customers, will fall 6.8% next week on top of an 11.8% cut in February.
The decision was made after three weeks of hearings, during which state-owned Israel Electric Corporation fought to have the rate cut reduced or eliminated altogether. IEC said the reduction would worsen its already weak financial condition. Surprisingly, the Government Companies Authority backed the utility and asked that the reduction be cut by half.
“The company was surprised at the hasty decision of the Electricity Authority, which prevented IEC from appearing before the plenary and to present a series of facts the authority would have to consider when determining the rates but instead chose to totally ignore,” a spokesperson for IEC said. “This hasty decision endangers the energy sector and will lead to rate increases in the long run.”
IEC said it would turn to the courts to compel the authority to make to make what it called “an informed and professional” decison.
The main reason behind the rate cut us a 17% decline in the world price for coal in recent months, at a time when IEC has stepped up its use of the fuel. On the other hand, the price of natural gas IEC buys from the gas cartel’s Tamar field has risen 2% while the appreciation of the dollar offset some of benefits of lower coal prices.