Government Decides on Slight Reduction in Electricity Prices
The step was a result of a comprehensive study of Israeli Electric Company policies which showed excessive consumer fee charges for the development of the electric grid
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Beginning January 15, 2018, the rate of electricity for domestic consumers will be reduced to 46.19 agorot (before VAT) per kWh from 47.26 agorot. The reduction will bring savings of 100 NIS per household per year.
The reason why the authorities decided to lower the price of electricity is because a comprehensive examination they carried out showed that the Electric Company had charged excessive fees from the consumers for the development and maintenance of the electricity grid. In the past, it turned out that a large part of the money intended for investment in the network was utilized by the company for other purposes.
Therefore, the government is allocating an investment in the development of the electricity network for 2018 to the amount of NIS 2.4 billion, compared to 1.5 billion NIS last year.
Additional parameters that affected the decline in electricity prices is the decrease in gas prices, which constitutes more than half of the fuel used by the Company to produce electricity, and the erosion of the dollar by about 8%, since gas prices are set at a dollar rate.
An 8% increase in general electricity consumption also contributed to the decline in prices. Since the Israel Electric Company is providing more electricity with the same fixed-price infrastructure, this means a reduction in the overall cost to each consumer.
Despite the reduction to domestic consumers, large consumers and especially industrial plants which use high voltage will undergo price increases. The price of electricity to high voltage consumers will rise by 1.8%.