|M.Sc Student||Sharon Levy|
|Subject||Reforming the Electricity Supply Industries|
|Department||Department of Industrial Engineering and Management||Supervisor||Full Professor Kim Moshe|
This paper is focus at the British experience of reforming the electricity supply industry (ESI), review researches done in Scandinavia, South America, Australia, New Zealand, and the United States. It analyze the formation of electricity markets in those countries, whether it is possible to present competition into an ESI in a way that improves efficiency, and will grant consumers with profits, and reduce regulation problems. which lessons have to be taken in account from recent reforms, and what are the implications as far as the Israel Electric Company (IEC) is concerned? In a monopoly, determining the problem derives from the price, and not of production, which is efficient. In Israel the motive for privatization is solely political. In the present situation, electricity tariffs are under control and set by the Public Services Authority. Electricity and its efficient production are controlled by the National Command and Control Center. In light of past experience, one can see that no economical advantage was gained by transferring profits from increased efficiency to the consumers. As one may learn from this paper, that privatization of IEC, which is vertically integrated in a legal monopoly and under state ownership, and the vertical separation of the electricity chain into its components, requires a long line of necessary conditions for the electricity market. These entail the establishment of a large number of means of measurement and control, trade rules, and operational management bodies at enormous cost. Therefore no benefit would arise from the privatization of this company and the opening of the market for free production competition is sufficient.