Electricity bills for June and July 2012, which will reach consumers in the coming days, will be 30-35% higher than the bills for the corresponding months of 2011, Israel Electric Corporation (IEC) (TASE: ELEC.B22) said today. The higher bills are due to the 25% rate hike over the past year, and higher electricity consumption because of the heat waves in June and July.
IEC says that electricity consumption in June-July rose 9% to 1,429 kilowatt/hours from 1,300 kilowatt/hours in the corresponding months of last year. It projects that electricity consumption will rise to 1,523 kilowatt/hours in August-September, 10% more than in the corresponding months, although less than the record consumption of 1,630 kilowatt/hours in the corresponding months of 2010, due to a severe heat wave that August.
This evening, Ministry of Finance director general Doron Cohen will convene a meeting to discuss IEC's demand for an immediate capital injection of NIS 3 billion. IEC warns that without the injection, it will not have enough money to buy fuel for the production of electricity in August-September.
In early 2012, IEC requested government guarantees for the raising of NIS 6 billion, which the Ministry of Finance halved because of objections by Accountant General Michal Abadi-Boiangiu. The fundraising is part of the measures to close IEC's cash flow shortage caused by the cessation of Egyptian natural gas deliveries and the need to buy more expensive diesel and industrial oil for the generation of electricity. Diesel costs six times more than Egyptian gas. IEC says that the cost of fuel for the generation of electricity reaches NIS 100 million on peak days, and is NIS 60-100 million a day during summer.
IEC will need an additional NIS 10 billion in 2012 to finance the extra cost of fuel. The natural gas shortage should end in 2013 when the Tamar field comes on line.
Published by Globes [online], Israel business news - www.globes-online.com - on August 6, 2012
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