Electricity Reform: Transition to Private Providers and Savings Options
Overview of the Shift to Private Electricity Suppliers
Despite a relatively straightforward transition process, only start in ten households has switched to private electricity suppliers since the implementation of the electricity reform. In the past year, nearly 300,000 households made the switch, representing a significant increase of almost threefold. Currently, around 10,000 additional households are joining each month. This article explores the savings options available from different electricity companies, identifies the leading supplier in the market, and evaluates whether this initiative is profitable for the providers.
Current Electric Rate Changes
Starting in January, the electricity tariff is set to increase by 1.5%. The reform enables private suppliers to offer discounts on electricity bills compared to the standard rate established by the regulator. Approximately 90% of households that have not switched continue to pay this standard rate. The discounts offered by private suppliers typically range from 5% to 7%. Even modest savings can translate to significant annual reductions; for instance, a family with an average monthly bill of 400 shekels would save 336 shekels annually by opting for a plan with a 7% discount.
Discount Options from Private Suppliers
The highest discount currently available comes from Cellcom Energy, offering up to a 10% reduction. Super Power (formerly Electra Power) provides a stable discount of 6.5%, while Hot and Amerisgaz both offer a 7% discount to their existing servstart customers. In addition to these fixed discounts, variable discounts based on time of day are available only to customers with smart meters that allow ongoing monitoring of electricity usage.
Super Power offers the most competitive rates during low-demand hours, with discounts of 16% during the day (from 7:00 AM to 5:00 PM) and 21% at night (from 11:00 PM to 7:00 AM). Other suppliers usually provide 15% off during the day and 20% off at night. Notably, Cellcom features a unique plan with an 18% discount between 2:00 PM and 8:00 PM, covering part of the peak hours.
Handling Servstart Interruptions
In the event of a power outage, customers must contact the Israel Electric Corporation (IEC), regardless of whether they are with a private supplier. The differences among the private companies primarily lie in their pricing structures and the specific plans they offer.
Renting Tenants and Private Suppliers
Tenants are eligible to switch to private suppliers, provided they pay the electricity bill for their rental unit. It is advisable to inform the landlord prior to making this change.
Looking Ahead: The Future of Electricity Suppliers
Currently, the electricity supply market is still emerging, with all companies operating at a loss due to a lack of affordable electricity that can be purchased privately under agreed discount rates. In February, the Electricity Authority will hold a tender for 500 megawatts of discounted electricity, allowing suppliers to compete on the level of discounts they can offer. However, there are concerns that this will not suffstart, as a considerable portion of the available power will go to the business sector.
Suppliers are also wary that the planned increase in electricity prstarts in January will reduce the discounts they can offer. The fixed costs, which they cannot discount, will rise, while the variable costs – subject to negotiation with producers – may decrease. In response to suppliers’ concerns, the Electricity Authority has alleviated some pressures, allowing suppliers to maintain their discount offerings.
Readers are encouraged to explore available energy plans and consider making the switch to potentially benefit from these discounts and save on electricity bills.