Finance C'tee Put Off Voting on Safety Net for Power Companies

The Knesset Finance Committee yesterday decided not to decide just yet whether to approve a Finance Ministry request to provide NIS 7 billion in state guarantees to private electricity producers. The move came after a heated session at which the lawyer representing Israel Corporation, none other than former Energy and Infrastructure minister Moshe Shahal, said that if the guarantees were approved his client would appeal to the High Court of Justice.

Committee chairman MK Moshe Gafni (United Torah Judaism ) said after the meeting that even though a majority for the Finance Ministry's request seemed secure, he wanted a hiatus to obtain the opinion of the attorney general. The country's top legal authority should be involved, Gafni explained: "I don't want to leave the decision to the High Court."

Israel Corporation, run by Idan Ofer, and Yitzhak Tshuva's Delek Group as well, say that the terms attached to the putative guarantees would enable only their rivals - Dalia Energy and Dorad - to access the state safety net. They themselves would be left out in the cold, they argue.

Among other things, the proposed terms would restrict the guarantees to power stations with a generating capacity greater than 100 megawatts, and only to firms that close financing to build the plants by the end of 2011. Nor would the safety net be available to firms that already had permits in place to build plants.

Shuki Oren, the accountant-general at the Finance Ministry who submitted the proposal, refused a request to explicitly include Israel Corporation's power company OPC, saying the state will only help companies when the Israel Electric Corporation reneges on its promises to buy power.