Electricity bills expected to drop as major privatization reform enters into effect
Even without a smart meter, domestic consumers now free to choose between Israel Electric Corporation, seven other private suppliers; Energy Minister expects bills to drop 5 to 20%
Sue Surkes is The Times of Israel's environment reporter
A major electricity industry reform entered into effect in Israel on Thursday, allowing all consumers, including those without smart meters, to choose between suppliers.
Energy Minister Eli Cohen claimed the competition would reduce household energy bills by five to 20 percent, with electricity costs going down by NIS 2 billion to NIS 3 billion ($550 to 820 million) yearly.
A smart meter records electricity use constantly, allowing a reading and remote transmission of consumption data at least every quarter of an hour.
For the past few months, only smart meter owners have had the option of transitioning to a private supplier.
The Electricity Authority is aiming to have smart meters installed everywhere by 2028.
As of Thursday, however, any owner or renter of a residential property with an electricity meter can choose to leave the Israel Electric Corporation for any of seven private suppliers.
These include three companies already involved in energy and electricity-related fields (Pazgaz, Amisragaz, and Electra) and four working in telecommunications — Bezeq, HOT, Cellcom, and Partner. All offer the benefit of large customer service networks.
Two additional private companies serve the business sector — Mashav Energy, which built one of the country’s first private power plants, and Shikun & Binui, a huge infrastructure and real estate company.
The electricity suppliers offer various programs with different discounts depending on consumption hours, days of the week, and subscriptions to other company services such as TV, internet, and phone, in the case of telecommunications firms.
Transitioning to a new supplier is done online, without disconnection or a technician’s visit.
A customer applies to the chosen company, providing his or her Israel Electric Company contract number (which appears on all bills), electricity meter number, and name, ID, email, and telephone number to digitally sign a power of attorney for the company to implement the transition process.
A contract can be stopped at any time without charge, although it is recommended that you read the contract before doing so.
The regulations allow suppliers to buy energy directly from solar fields or the grid.
Solar energy is not only cheaper to produce than fossil fuels; solar companies can offer long-term contracts with better prices per kilowatt than the grid managers can. The latter provides spot prices throughout the day and night based on a mix of fuels.
Because of this, the market is seeing suppliers and solar field companies teaming up. The Cellcom telecommunications company, for example, has joined the kibbutz-owned solar company Meshek Energy to form Cellcom Energy. The Electra company, known for its air conditioners and elevators, has partnered with the renewable energy company Enlight to create Electra Power.
This does not mean customers can order a particular amount of solar energy. All energy generated in Israel passes through the same single grid. If you use energy at midday in the summer, the mix of fossil fuel and renewable energy sent through the grid will likely contain more of the latter. The opposite is currently true at night.
That said, the expected increasing demand for solar energy is making the construction of solar fields far more economically viable and attractive to investors.
