Legal Wrangle May Pull Plug on Dedication Ceremony at Power Plant

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The Dorad power plant south of Ashkelon. Credit: Beny Mor

A dedication ceremony planned for Tuesday, inaugurating the country’s largest privately owned electric power station, may have to be scrapped amid last-minute legal complications.

The argument against proceeding with the opening of the plant, which will provide competition for the state-owned Israel Electric Corporation, is that operation of the new Dorad Energy plant – near Ashkelon on Israel’s southern coast – would violate a recent Haifa Labor Court ruling. The Dorad plant was built over a three-year period at a cost of 4.3 billion shekels ($1.2 billion).

Dignitaries slated to attend the ceremony include Finance Minister Yair Lapid, Energy and Water Resources Minister Silvan Shalom, as well as a high-level Turkish delegation that will be present because a Turkish firm, Zorlu Energy, is a partner in the venture. However, as long as the legal tangle is not settled, Dorad may not have a valid license to produce electricity.

Dorad Energy received a permanent electricity production license about two weeks ago, but a week earlier the labor court barred the state from taking any steps that would, in the words of the ruling, harm the “status of the Israel Electric Corporation.” The ruling came in a case involving a dispute on an entirely separate matter, involving the decision by IEC CEO Eli Glicksman to eliminate workers’ wage hikes.

The Haifa Labor Court went beyond the immediate wage issue and addressed structural issues at IEC, including an order that IEC’s status not be harmed. Government officials are considering appealing the court’s decision, claiming the ruling is delaying the opening of the electricity market to competition and tying the hands of regulators. In the interim, though, the argument surfaced that opening the Dorad plant would violate the order by harming IEC’s status. Others counter that Dorad has had a conditional license at the plant for years. Legal officials are to meet on the matter today.

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