The price of electricity will increase this Monday at a rate of 8.6% - 1% less than predicted

wwwww

by Ifi Reporter Category:Financial Jul 27, 2022

The price of electricity will increase this Monday at a rate of 8.6%, one percent less than the original decision of the Electricity Authority. This means that the price of electricity will increase on average for a family in two months by about 86 shekels, which is 43 shekels per month and more than 500 shekels per year.
The Electricity Authority announced the final price on Wednesday evening after holding an oral hearing procedure for the main parties who challenged the decision to raise the price of electricity at such a high rate, led by the Association of Manufacturers, whose leaders warned against an inflationary spiral.

The increase in the price of electricity is expected to increase the prices of hundreds of types of products and services in the economy, making production and trade more expensive. Also, high expenses of the local authorities will become more expensive, partly due to street lighting and the operation of traffic lights. The estimates are that inflation will rise in the months of August and September by at least another 0.2% just as a result of the electricity price increase.
The increase in the price of electricity is expected to increase the prices of hundreds of types of products and services in the economy, making production and trade more expensive. Also, high expenses of the local authorities will become more expensive, partly due to street lighting and the operation of traffic lights. The estimates are that inflation will rise in the months of August and September by at least another 0.2% just as a result of the electricity price increase.
The Electricity Authority announced at the end of the hearing that "following the hearing it published, the Electricity Authority decided this evening to update the known cost of the Electric Company in a way that increases the rate for the average domestic consumer by approximately 8.6%. The Authority's decision slightly moderates the increase published before the hearing. This, in light of a reduction The emission permit limit for the gas units at the Eshkol power plant and other efforts that may mature into a certain reduction in the use of coal in the short term."
Since the decision of the Electricity Authority was published according to which the price of electricity for consumers should be increased by 9.6% and for businesses by 12%, there have been attempts to reduce the rate of increase, and already about two weeks ago it was indicated that the increase will be lower, and will be 7.6%-8% for private consumers instead of 9.6%.
However, the manufacturers' association says that the percentage that was cut from the original increase in price is indeed due to the increase in output in Eshkol, which runs on gas and not coal, but the rate of the increase does not cover the high costs of coal, which is still responsible for a significant part of electricity production. Therefore, according to them, there is a fear that we will see another significant price increase on January 1.
The manufacturers' association stated that "it is not clear what the Electricity Authority intends to do with a 'budget hole' of NIS 2.64 billion (the difference between the recognized cost of NIS 28.81 billion, and the cost that we recognize as part of the hearing of NIS 26.17 billion), which was created after the Authority did not accept the outline that we proposed, and which was covers all the excess cost. In light of this, we believe that this is far from the end - the Electricity Authority will again want to raise the rate by 10% at the beginning of 2023."
They also added that the price could only be raised by 4.6% for home consumers and by about 5% for businesses according to the outline they proposed. They also said that "it is a step in the right direction, but the increase can and should be moderated more because those who will be hurt are mainly the weak strata and the small and medium-sized businesses."

117 Views

Comments

No comments have been left here yet. Be the first who will do it.
Safety

captchaPlease input letters you see on the image.
Click on image to redraw.

ABOUT IFI TODAY

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum

Testimonials

No testimonials. Click here to add your testimonials.