Steinitz: Israelis Pay Less for Electricity Than Most

YERUSHALAYIM -
A worker of Israeli Electricity Company is raised by crane to a utility pole to perform maintenance work, in the outskirts of Yerushalayim. (Flash90)

Beginning January 1, Israelis will pay less for electricity. Rates for home users will fall by 4.13%, and for businesses, factories, and public use (street lighting, etc.) by 5.3%. Electricity will cost an average of 53 agurot per kilowatt hour, instead of the current 55 agurot.

The reduction is a reflection of changes in Israel’s energy economy, most prominently the entry of natural gas from the Tamar, and beginning next week the Leviathan gas fields into electricity production.

The use of natural gas is responsible for 3.3% of the upcoming discount, economists said. Other factors that contributed to the reduction include reforms in the Israel Electric Company, a reduction in the cost of coal (which is still largely used to produce electricity), and a consumer rebate resulting from the sale of gas from Israel to Egypt, as stipulated by the government as a condition for its approval of the deal.

In an interview on Radio 103, Energy Minister Yuval Steinitz said that studies have shown that Israelis pay among the lowest rates for electricity among Western countries. “A lot of it has to do with the entry of gas into [the] production mix. Electricity here is far less expensive than in countries like Britain, Norway and Germany,” he said.

A study by Globes determined that that was indeed the case for home users, although the rates for business and industrial use were closer to the OECD averages for electricity costs.