Daily Israel Report

Israel Electric Company to Pull Plug on Free Power for Workers

IEC Chairman Yiftach Ron-Tal told a Knesset committee Wednesday the firm is willing to end a decades-old perk to workers: free electricity.
By Chana Ya'ar
First Publish: 8/29/2012, 5:10 PM

Electricity
Electricity
Israel news photo: Flash 90

IEC Chairman Yiftach Ron-Tal told Knesset members on Wednesday the company is willing to end a decades-old perk to workers: free electricity.

In discussions with the Knesset Finance Committee, Ron-Tal promised that “as part of reform, we will get rid of the phenomenon of free electricity.”

The company's workers are among the highest-paid in the country, and its union, which includes some 9,000 members, is one of the strongest. The company also employs 4,000 temporary workers, but fires them within five years – before they have remained long enough to earn tenure.

Sources said a plan being floated by management in order to avoid a massive strike would involve replacing the free power perk with a salary add-on, totaling at least NIS 1,000, possibly more.

During Ron-Tal's meeting with the Knesset Finance Committee, lawmakers approved NIS 1.4 billion in guarantees for an IEC bond issue.

According to the company, the money is needed to help deal with the transition back to fossil fuels such as diesel and industrial oil for use in generating electricity.

Production costs have literally doubled since the region-wide Arab Spring uprisings that resulted in the fall of Egyptian President Hosni Mubarak – and the resulting revocation of Egypt's years-long agreement to sell natural gas, at a cheaper price, to Israel.