On July 25, the reform enabling people to switch their electricity accounts without the need for a smart meter will come into force. The reform, led by Minister of Energy and Infrastructure Eli Cohen, will allow 3.1 million electricity customers in Israel to move their accounts away from Israel Electric Corporation. On Wednesday, the Ministry of Energy and Infrastructure held a press conference to launch a publicity campaign designed to boost awareness of the change.
Electra Power, Amisragas, Cellcom, Partner, Hot, Bezeq, and Pazgaz have already acquired customers among the approximately 900 households around Israel with smart electricity meters installed. These customers could reach savings of some 20% on their monthly electricity bills. Up to now, the 2.2 million customers with the old meters were unable to switch accounts, and had no choice but to pay Israel Electric Corporation its tariff of NIS 0.6145 per kilowatt hour (including VAT).
Now, they will be able to move their accounts to other companies, but they will still not benefit from the maximum discount. The reason for that is that a smart meter, unlike the old meters, gathers data continually and transfers it once a day, with a half-hourly breakdown, to the supplier and to Noga - Independent System Operator Ltd., which manages the power grid. The old meters are not capable of monitoring power usage patterns by the hour or half-hour. They are simply read periodically.
According to Israeli fintech company RiseUp, Israel’s 3.1 million electricity consumers spend an average of 8,400 a year on electricity. RiseUp has also examined how many customers have switched electricity supplier since the beginning of the reform, and the numbers are surprising. Only 6% of its customers, who are characterized by high financial awareness, have actually made the switch. For a sample of 500 families that changed supplier, the average monthly saving is 30%. This means that these customers are not only benefitting from the lower tariffs offered by the new supplier, but have also changed their power consumption habits, for example by running washing machines and dishwashers at night when power is cheaper, something that a smart meter can take account of while a conventional meter cannot.
Israelis with smart electricity meters have been able to transfer their electricity accounts for eighteen months, but a survey by RiseUp among over 6,000 respondents found that 43% of them had not even heard of the electricity supply reform, and. Asked "Do you intend to change your power supplier?", have the respondents (50.22%) said they had insufficient information. About the smart meter, 27% knew that they had one, 35% answered they did not have a smart meter in their homes, and 30% did not know what a smart meter was.
Changing power consumption patterns, which is what the private companies are competing over, has a double benefit. The customer can consume the same amount of power but pay less, while the country benefits from "peak shifting", a switch of consumption from peak hours to times when demand is lower.
For the time being, the saving for customers without a smart meter will be fairly small. To obtain a more substantial discount, consumers are dependent on Israel Electric Corporation, which is responsible for the installation of smart meters. At first, the company was supposed to complete installation by 2032, but the timetable has been shortened, with a deadline of 2028. A customer who wants to have a smart meter installed immediately (in fact there is a waiting period of up to 120 days) can call Israel Electric Corporation (103) and pay NIS 234.37.
The new suppliers vary in the terms they offer: the size of discounts, and the times of day when they apply. Each household therefore needs to choose the company that suits its power consumption pattern.
"This is the biggest reform in the Israeli economy since the mobile telephony reform," said Minister of Energy and Infrastructure Cohen. "We are breaking the monopoly of Israel Electric Corporation, opening up the power supply sector to competition, and saving citizens NIS 3 billion."
Published by Globes, Israel business news - en.globes.co.il - on July 21, 2024.
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