Israel Electric Corporation

After British forces conquered Palestine, they had to deal with conflicting demands rooted in Ottoman rule. For example, on 27 January 1914, the city of Jerusalem had granted a Greek citizen, Euripides Mavromatis, concessions for the supply of water, electricity, and the construction of a tramway system in the city. Work under these concessions had not begun and by the end of the war the British occupying forces refused to recognize their validity.

Under the British administration, concessions from the Mandatory government were given. On 12 September 1921, the British formally signed the “Auja (or Yarkon) Concession” which granted Pinhas Rutenberg's Jaffa Electric Company a 70-year concession granting it exclusive rights to generate, distribute, and sell electricity in the administrative District of Jaffa,[3] and authorized Rutenberg to generate electricity by means of hydroelectric turbines that would exploit the water power of the Auja (Yarkon) river. However, Mavromatis challenged the concession claiming that his concessions conflicted with the Auja Concession and that he was being deprived of his legal rights. The Mavromatis concessions, in effect despite earlier British attempts to abolish it, covered Jerusalem and other localities (e.g., Bethlehem) within a radius of 20 km (12 miles) around the Church of the Holy Sepulchre.[4] In the end, Rutenberg's company concessions remained and the company built a power plant that produced electricity using diesel-fueled engines, and by 1923 Jaffa Electric Company's grid covered Jaffa, Tel Aviv, neighboring (mainly Jewish) settlements, and the British military installations in Sarafand.[5]

In 1923, Rutenberg founded the Palestine Electric Corporation, Limited[6] which was granted the "Jordan Concession". Rutenberg merged Jaffa Electric Company into that company, which in 1961 was renamed the Israel Electric Corporation Ltd. Rutenberg built the First Jordan Hydro-Electric Power House at Naharayim on the Jordan River, which opened in 1932.[3][7] Pursuant to the Concessions, the Company was granted the exclusive right to generate, supply and distribute electricity and to sell it throughout the Mandate for Palestine, except in Jerusalem and its environs. The plant produced much of the energy consumed in Mandatory Palestine until the 1948 Palestine war. Other power plants were built in Tel Aviv, Haifa, and Tiberias.[8]

Jerusalem was the only part of Mandatory Palestine not supplied by Rutenberg's plants. Mavromatis defended the concession for Jerusalem granted to him by Ottoman authorities, and resisted Rutenberg's attempts to build a power station that would serve Jerusalem. Only in 1942, when his British-Jerusalem Electric Corporation failed to supply the demands of the city, did the Mandatory government ask the Palestine Electric Company to take over the supply of electricity to Jerusalem.[9]

The Concessions expired after 70 years, ie., on 3 March 1996, and from that time Israel's Electricity Sector Law - 1996 has applied, replacing the Electricity Concessions Order of 1927 of the Mandatory authorities. (See Electricity Authority (Israel).)

The IEC is one of the largest industrial companies in Israel, owning and operating an extensive nationwide power distribution network fed by 17 power station sites (including 5 major thermal power stations) with an aggregate installed generating capacity of 10,899 MW. Most of the base load electricity is generated using coal, though by the end of 2010 the company expected the majority (55%) of total installed generation capacity to be in the form of natural gas plants. In 2009, the company sold 48,947 GWh of electricity. To meet projected future electricity demand, an IEC capital investment program provided for the addition of 2,578 MW of installed capacity by the end of 2011. In addition, the government of Israel was seeking private companies to generate an additional several thousand megawatts by the middle of the 2010s, which would then be distributed by the IEC.

The Orot Rabin power station owned by the IEC has Israel's second-tallest structure, a chimney, standing at 300 m, while Tel Aviv's distinctive Reading Power Station was one of its earliest.

Israeli former Olympic sailor Shimshon Brokman has worked for Israel Electric Corporation since 1988, from 2006 as Head of the Fuel Management Department.[10]

The company's current CEO is Ofer Bloch.

IEC provides power to the Palestinian territories. It is one of three sources of power for the Gaza Strip,[12] and the West Bank.[13] Palestine Electric Company, founded in 1999 as a subsidiary of Palestine Power Company LLC, operates in the Gaza Strip power generating plants with a generation capacity of approximately 140 MW. It has been granted by the Palestinian Authority an exclusive right to generate electricity in the Gaza Strip and sell it to Palestinian Authority owned or managed institutions for 20 years, which may be extended for a maximum of two consecutive five-year terms. The company currently does not have any fuel for its generator. Gaza also receives some power from Egypt, though supply is unreliable.[14] Palestine Power Generation Company Plc, founded in 2010, operates a natural gas power generating plant in the West Bank.

On 23 February 2015, IEC intentionally cut off the West Bank power for about 45 minutes due to unpaid debts.[15] Two days later it again cut off power, stating it was a warning to the Palestinian Authority to begin paying down the debt, which at that time was NIS 1.9 billion.[16] The majority of the debt is owed by the PA and Jerusalem District Electricity Company (JDECO) which is a Palestinian electricity firm which buys its power from IEC and serves east Jerusalem, Bethlehem, Ramallah and Jericho areas.[17] IEC stated that it is losing NIS 85 million per month on power supplied to Nablus and Jenin that is not being paid for, causing the majority of IEC’s quarterly loss.[18] The Palestinians accused IEC of collective punishment,[19] however, IEC stated that it must operate independently and are treating this as it would any customer who does not pay their debts.[20]

On 31 March 2016, IEC again cut power to parts of the West Bank, in the Jericho area, over NIS 1.7 billion in debts.[21] On 4 April, IEC cut power in the Bethlehem area,[22] and the following day it cut power in the Hebron area.[23] On 6 April, IEC restored full power to the West Bank after it received a payment of NIS 20 million, and an agreement to receive a full debt repayment schedule within seven days.[24]

From June 2017, the Palestinian Authority decided no longer to pay the bill for Gaza's electricity to the Israel Electric Company. It is said that the Authority’s decision to cut off payments is an effort to undermine rival Palestinian group Hamas, which governs Gaza.[14]

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