Public Utilities Authority (Electricity) chairwoman Orit Farkash-Hacohen has asked the Ministry of Finance for permission in advance to raise electricity rates by 19% over three years, including 6% in 2012. The document sets out the government package and principles for raising electricity rates that the Public Utilities Authority's plenum will discuss.
Public Utilities Authority said that its plenum might discuss spreading the price hikes over a longer period
The Public Utilities Authority wants prior permission, ahead of any decision by its plenum, for government assistance that will offset the anticipated price hikes in electricity in the absence of government aid, and which would enable the price hikes to be spread out. Suggested measures include increasing the excise exemption on fuels and government guarantees to Israel Electric Corporation (IEC) (TASE: ELEC.B22).
Public Utilities Authority's documents states that government aid should be conditional on the raising of capital by IEC, streamlining, and the immediate release of NIS 600 million from IEC's special trust fund. This fund includes items that were not recognized for deposit in pension funds. In addition, financing for fuel will be deposited in a special account that the Public Utilities Authority will supervise.
Public Utilities Authority said, "The natural gas crisis requires extraordinary action in cooperation with the government to ease the burden on consumers. Both the government and IEC should contribute to ease the expected rise, thereby preserving the necessary balance between consumers' interests and maintaining the functioning of IEC in this extraordinary situation. We're talking about a limited period, after which the crisis will end with the entry of private power producers and the resumption of natural gas supplies to the Israeli economy."
Published by Globes [online], Israel business news - www.globes-online.com - on January 12, 2012
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