Sources inform ''Globes'' that Israel Electric Corporation (IEC) (TASE: ELEC.B22) will be forced to increase its purchases of low sulfur coal by an estimated $30-40 million a year because of ongoing delays in the installation of scrubbers at the Orot Rabin Power Station in Hadera.
Low sulfur coal costs more than regular coal. IEC is supposed to install scrubbers to remove 90% of the sulfur emissions from its coal-fired power plants in 2005. As a result in the delays on the scrubbers, the Ministry of Environmental Protection has ordered the company to use low sulfur coal.
The delay in the installation of scrubbers has cost IEC $130-140 million, most of which has been passed on to consumers because the cost of fuel is a recognized cost in electricity rates.
According to figures IEC has submitted to the government ahead of another discussion by the National Planning and Building Commission, the company expects to spend an additional $45 million on low sulfur coal in 2009. This will bring the total extra cost caused by the company's procrastination to $180-200 million for 2005-09.
Published by Globes [online], Israel business news - www.globes-online.com - on March 3, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009