Protecting Israelis' wallets – the Israel Electricity Authority's decision

The Israel Electricity Authority has refused to include the losses of the Electric Company "Hevrat Hashmal" in tariffs for citizens. The regulator ruled that the company must cover 230 million shekels from its own reserves, rather than passing them on to consumers. The decision is related to losses from delays in the construction of the PGU-70 and PGU-80 power units.

The Israel Electricity Authority made a principled decision, refusing to pass on the multi-million shekel losses of the state-owned company "Hevrat Hashmal" to consumers. The regulator ruled to include only 5.1 billion shekels of the total project cost of 5.3 billion for the construction of the PGU-70 and PGU-80 power units in the tariff grid. The remaining 230 million shekels must be covered by the company from its own internal reserves. The conflict arose over the allocation of costs for building two power units at the "Orot Rabin" complex in Hadera. The completion of the facilities was delayed by more than two and a half years, causing economic damage of 4.6 billion shekels. The majority of losses came from operating old power plants (about one billion) and environmental costs (approximately 2.8 billion). The regulator recognized some delays as objectively justified due to the pandemic and hostilities, but also identified internal issues: organizational failures, ineffective interaction with suppliers, and planning errors. The construction of the units was coordinated as part of the 2018 market reform, and these units will likely be the last major facilities built by "Hevrat Hashmal" independently.