The electricity bill will rise on Thursday by 2.6% Amidst Economic Challenges and Ongoing War

In a decision reached during today's Electricity Authority plenum meeting, the electricity prices in Israel are set to increase by 2.6% starting February 1, 2024. The approval follows a three-week public hearing process and aims to address various challenges, including economic difficulties due to the ongoing war.

The initial proposal by Lyco suggested a 13% increase, but the Authority recognized the strain on citizens and worked to minimize the impact. The added cost for consumers is estimated at an average of NIS 10 per month, totaling an additional NIS 120 annually per household.

Factors contributing to the price hike include a surge in consumer price indices over the past year, the integration of renewable energies, and efforts to reduce air pollution. Additionally, approximately 23% of Israel's electricity production still relies on coal, and the electric company carries a debt of NIS 1.9 billion for coal-related expenses.

The postponement of a more substantial increase is attributed to the impending sale of the Eshkol power plant, valued at NIS 9 billion. However, the financial transactions are not expected to be completed until July of this year, impacting the company's immediate financial relief.

As a response to the ongoing war and economic challenges, the usual January update on electricity prices has been delayed until the end of this week. The Electricity Authority, after publishing a lower price decision for public comments, is set to make a final decision on a 2.7% increase, taking into account public feedback.

Simultaneously, an additional fuel price increase is anticipated on Thursday, with estimates suggesting a rise of 10-20 shekels, unless the shekel strengthens significantly against the dollar. The global increase in oil prices compared to the previous month contributes to these expectations.