'Electricity Rates May Rise 15%-30% Unless Egyptian Gas Returns'

Israelis could face a 15% to 30% increase in the cost of electricity if Egypt doesn't resume the natural gas supply, the CEO of the Israel Electric Corp. said yesterday. Speaking to the Knesset Economic Affairs Committee, Eli Glickman said the loss of Egyptian gas would cost the Israeli economy NIS 3-4 billion more in 2011.

Data from the Utilities Authority (Electricity) show that the price of production has already increased by 2.5% because of the switch to costlier fuels.

The committee held a special debate on the breakdown of the Egyptian gas supply yesterday.

"The IEC is preparing for the worst-case scenario, which is a complete shutdown of Egyptian gas supplies, Glickman told the committee. But the utility is accelerating plans to import and use liquefied natural gas.

"LNG may cost more than regular gas, but it is significantly cheaper than petroleum fuels," Glickman said, adding that it is relatively cleaner, too. The IEC is working on a schedule to bringLNG to Israel by mid-2012, he said.

The lack of Egyptian gas has caused the company to rely on a single Israeli supplier (Tethys Sea) with all that implies, in exposing the IEC to technical problems - and higher prices. But Glickman said the IEC does not foresee any power outages as a result.