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Marketplace Morning Report

Israel utility policy leaves some in the dark

Marketplace Staff May 29, 2007
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KAI RYSSDAL: Israel’s national electric utility disconnects tens of thousands of people every year because they don’t pay their bills.

The company doesn’t like doing it — it’s expensive, not to mention bad PR. So it’s found a way to lower the number. It installs pre-pay meters at the homes of problematic clients. Just like a pre-paid calling card, consumers pay for power before they use it.

But the solution brought its own problems, as Orly Halpern reports now from Tel-Aviv.


ORLY HALPERN: Corin Cohen is a mother of six who survives on Social Security payments. She lives on the edge, buying electricity for her pre-paid meter only when she sees she is about to run out.

CORIN COHEN: Let us see how much I have now. Oh, I don’t have any credit. I see I am over. I am in debt 10 shekels.

Cohen can get the money to buy more electricity, but her challenge is getting to the electricity company to purchase it. She often doesn’t have the $2.50 for the bus, so it takes her an hour by foot.

COHEN: Look, it tireds me a little, this electricity. I wouldn’t say it doesn’t. It means walking a lot.

Not only are electric companies hard to get to, the hours are inconvenient. They’re only open 7:30 to 2:30, and closed Fridays and Saturdays.

AHMED ABO-ZAYD (voice of interpreter): In the beginning, I had to always go to the electric company to pay, and there are days that it was closed. And I would get stuck without electricity.

That’s Ahmed Abo-Zayd, a father of six. Losing electricity at his home puts his children at risk of being hospitalized.

ABO-ZAYD: I have two kids sick with asthma who use breathing devices. You understand, they must have those devices operating.

And although you can buy more electricity with a phone call and a credit card, most of the poor who have the pre-paid meters, like Abo-Zayd, don’t have checks or credit cards because of bad credit.

A solution was found: sell the electricity at kiosks.

Israel Eherenfreund from the Electric Company explained why the new program made buying electricity more convenient for the poor:

ISRAEL EHERENFREUND: It enables them to buy electricity on their own budget, on their own time with a service that’s right now going into 24-hour service. That allows them to buy the codes for the meter not only at our offices, but now also at the shops that are open 24 hours, like 7/11 in the States or something like that.

Electricity can also be bought at lottery stations and Internet cafes. At Chat Center, near Tel-Aviv’s central bus station, business is booming.

It’s Saturday, and the electricity company is closed. David Makawi has no credit and little electricity left, so he’s come to the Chat Center to buy more.

[SOUND: Makawi speaks to clerk]

The teller punches the meter number into the computer and verifies Makawi’s name. Makawi hands over 150 shekels — about 40 bucks. He’ll go home and punch the code he received into his meter, buying him nearly two weeks of electricity.

MAKAWI: I have had this meter for a year, and during the last month I began buying at the kiosk here. It’s great.

Although the convenience of buying electricity has improved, the cost of electricity remains high — about 12 cents a kilowatt. Too high for poor families like Abo-Zayd’s.

ABO-ZAYD: They should be considerate of people’s economic situation. If there are situation where they can make discounts for people who really need it, so why not do that?

In Tel-Aviv, this is Orly Halpern for Marketplace.

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