Israel Electric Financial and Sector Reform Update
The Electricity Tariff
Tariff Structure
חברת החשמל
Israel Electric
In accordance with the Electricity Sector Law, the electricity tariff is set by the Electricity Authority (EA) and reformulated from time to
time. The outline of the formula is as follows:
Recognized costs per segment (e.g. fuel costs, operational costs,
depreciation costs and financial costs). Some of the recognized costs
are also attributed to funding the reform costs
Fair rate of return on equity
per segment
Electricity Tariff
Ongoing Update
Actual costs are examined every 2 weeks
by the EA (at the time of CPI and fuel prices
changes)
Discrepancies between forecasted costs
and actual cost are reconciled on the
earlier of:
■ A difference of 3.5%, provided that 3
months have passed since the last update
■ A difference of 5.5%
■The Annual Update
Annual Update
Once a year, The current
year's costs are updated
based on forecasts as well as
on previous years' reckoning
- the gap between the
previous year's forecast
components and the actual
costs of the previous year
Tariff update as of May 1st, 2022
On February 1st, 2022, the average household electricity
tariff increased by approximately 5.7%, following the EA
decision, mainly due to the increase in the global coal
prices.
The above was partially offset by:
•
Decrease in the USD/NIS exchange rate and in the global NG
prices
The sale of Ramat Hovav Power Station (half of which was
recognized in 2021 Tariff) and the publication of the results of
the tender for the sale of East Hagit Power Station
• On May 1st, 2022, an amendment was made to the annual
update of the electricity tariff for 2022, in which the
average household tariff decreased by 2.4% due to the
reduction of the excise tax on coal.
Source: IEC's Financial Statements for 2020FY, Electricity Authority's decision No. 62302 on January 24, 2022 - Annual Update 2022 electricity tariff to IEC's consumers
Investor Relations
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