Daily Israel Report

Israeli Electric Company Warns PA: Pay Up or be Cut Off the Grid

The Israel Electric Company on Sunday issued a final warning to the Palestinian Authority over one billion dollar debt.
By David Lev
First Publish: 3/2/2014, 7:17 PM

Electricity technicians at work
Electricity technicians at work
Israel news photo: Flash 90

The Israel Electric Company on Sunday issued a final warning to the Palestinian Authority (PA) – pay up or get cut off. The IEC gave the PA three days to come up with NIS 1.4 billion (nearly half a billion dollars) the Authority owes it. If it does not get the money, the company will cut power to the PA.

The PA is in this jam because it has habitually failed to pay its electric bill, despite the fact that it received money specifically for this purpose from various international donors.

The PA buys electricity from the IEC via the East Jerusalem Power Company, which distributes it to villages in PA-controlled areas of Judea and Samaria. It should be noted that the PA pays a discounted rate for IEC power.

The two sides have been negotiating the debt for some time, with the PA dodging giving a commitment to pay. In its latest gambit, the PA demanded that the IEC erase a significant portion of the debt, and set up a long-term payment schedule for what would remain of the debt. The IEC rejected those conditions out of hand, telling the PA that the best it could do was set up a payment schedule for half the debt – but that the other half needed to be paid by Thursday.

Analysts said that the main reason for the IEC's newfound tough stance was due to its internal accountants and board members demanding that the debt be closed – or written off, in which case the government's efforts to break up the IEC will have received a major boost. Unions have been fiercely fighting that possibility, and have threatened work actions if the plan to privatize the company by selling shares on public markets is enacted.