Electricity rates will rise 10% today. The Israel Electric Corporation (IEC) (TASE: ELEC.B22) last night received permission from the Ministry of Environmental Protection, after a request from the Ministry of Finance, to operate two out of its six units using fuel oil.
The Public Utilities Authority (Electricity) had originally called for a 20% hike in electricity rates today due to disruptions in the supply of Egyptian natural gas, and the rise of fuel prices on global markets. However, the rise was cut by 8% after Minister of Finance Yuval Steinitz lowered excise and purchase tax on diesel last night. Now the hike has been cut by a further 2%.
The Ministry of Environmental Protection has banned use of fuel oil for electricity production because of the high level of air pollution that it causes. In March, Minister of Environmental Protection Gilad Erdan allowed the IEC to use fuel oil for 12 hours after a breakdown in the natural gas pipeline from the Yam Tethys field. At the time Erdan said, "There will be no more open checks to pollute the environment just because it is a cheaper way to produce electricity."
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