Daily Israel Report

Israel to 'Go Dark' Next April?

A tough stance by a Knesset member could end up evoking a showdown with the powerful Israel Electric Company.
By David Lev
First Publish: 12/27/2011, 2:34 PM

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Israel could find itself “going dark” this coming April, after MK Carmel Shama-Hacohen said Tuesday that under no circumstances would the Knesset Economics Committee, which he chairs, extend the operating license of the Israel Electric Company beyond that time unless it takes real, solid steps for reform.

Considering that Israeli governments for the past 15 years have been after the IEC to agree to the reforms – so far to no avail – Israelis may find themselves suffering from IEC “work actions,” like blackouts and brownouts, this spring.

Shama-Hacohen laid down the gauntlet for the IEC in a Committee meeting Tuesday, when he and MKs on the Committee refused to extend the IEC's operating license altogether. In a heated discussion during the meeting, Energy and Water Ministry officials asked that the license be extended until 2013. The license needs to be extended annually because of the passage of the Electricity Law in 1996, which requires the IEC to make way for private electric providers. Until the law is implemented, the IEC continues to operate on a provisional basis, although in practice it remains a monopoly. Without the license, the IEC cannot legally generate electricity.

Shama-Hacohen slammed the IEC officials for ducking their commitment to reform. “Why do we have to go through this charade every year?” he asked. If the IEC intended to renege on its commitments and wanted to remain in business, the Knesset should pass a law abrogating its 1996 measure.

At that point, Shama-Hacohen called for a vote – and for the first time, the IEC request for a license extension was turned down. As it stands now, the license runs out on Friday. However, Shama-Hacohen said that he would call for another vote this week and recommend an extension of the license – but only until April 14, 2012. And there would be no further extensions unless real progress was made on reform – including restructuring the IEC, and providing competitors with access to the electricity grid. The IEC has vociferously opposed both for years.

Energy and Water Ministry officials expressed deep worry at Shama-Hacohen's stance, saying that they couldn't possibly arrange for legislation to ensure the transition to a private electricity market by April. In response, Shama-Hacohen said that the Electricity Law was very clear and simple to understand, and what was really needed was a firm stance by the government on implementing it.

Polls consistently show that IEC workers are among the best paid in Israel. The IEC workers' union is considered one of the country's strongest and has seen to it that IEF workers continue to get free electricity while the rest of the country is payin a steep hike in rates.