IEC chief: We're in horrific financial state
Israel Electric Corp. Chairman Yiftah Ron-Tal says company's external debt is NIS 45 billion. 'IEC has no control over its earnings because it does not set electricity tariffs'
"The corporation's balance is just over NIS 80 billion (about $22 billion), its external debt is NIS 45 billion ($12.5 billion) and its equity capital is NIS 17 billion ($5 billion). The company doesn't control its earnings as it does not set the electricity tariffs," Ron-Tal said.
"The IEC has a long heritage going back 80 years with extraordinary human capital that demonstrates commitment such as is rarely seen. It offers top notch service – electricity in Israel is high quality and supply standards are high with very few disruptions and it's cheap."
When asked about electricity tariffs, Ron-Tal explained that he "must ensure that the tariff reflects the cost of production. Right now, it doesn't. The gas supply is unsteady, and until private producers will become operational, Israel is faced with the danger of not being able to meet demand and of underproduction.
"I'm not about to mention figures. Everyone should be mobilized. It’s wrong to have citizens shoulder the full cost. In the current context of seeking solutions for the middle class plight, we can produce helpful solutions".
Ron-Tal continued, "Israel has become a gas principality. Flexibility in the use of crude oil must be enabled so the development of the Tamar gas field can be concluded. This instrument, this energy source called gas is the ultimate means with which to cut electricity tariffs. In the past 10 years since the discovery of the gas, no strategic decision was made on how to exploit this resource.
"The gas discoveries may prove to be the response to Israel's electricity demand for the next 50 years. Tamar is 80-90 kilometers (50-56 miles) away from Haifa; the distance between Tamar and Yam Tethys Oil and Gas is 180 kilometer (112 miles) – costs are double but we're laying down the expensive pipeline."
Ron-Tal called from above the stage for a new strategic program: "Pipelines that will ensure the supply of gas from open waters to the inland. We need another two pipelines, in northern and southern Israel; preferably operated by several gas suppliers and not just one.
"We need emergency reserves so that we don’t find ourselves in a situation in which prices are nine times higher in the event a pipe is damaged. This can be done by means of strategic reserves."
Ron-Tal further added, "There is a need for inland reserves; As regards the liquefied natural gas alternative – it is twice as expensive than non-liquefied gas but it is a diesel fuel substitute. I believe that we could reach a point in which gas constitutes 80% of our energy."
In conclusion, Ron-Tal said that "the strategy of turning the IEC into an energy company is a good one. Is allows for independence. I hope that the IEC becomes an energy corporation which holds emergency reserves. The IEC must streamline its operations and it has a lot to do in this area but is will be a mistake to take this course of action if it is not part of an overall reform."
Click here to read this report in Hebrew
- Follow Ynetnews on Facebook
