In most countries electricity generation and distribution is a government regulated monopoly. It's no different in Jerusalem.
Electricity concessions for Jerusalem was granted to Greek national Yorbides Mifrotes in 1914 when it was under Turkish rule. After international litigation the concession was passed on to the Jerusalem Electric Co. in 1926. Under Jordanian rule the company expanded its operation to include nearby cities and villages in the north, south and east of the city. A board of trustees was set up made up of representatives of the mayors of Jerusalem, Bethlehem, Beit Jala, Beit Sahour, Ramallah, Al Bireh and later Jericho. In 1953 Jordan had to agree to an Israeli request to set up an Israeli electricity company to supply power to the parts of the city that had become Israel.
In 1967 after the Israeli occupation, Israel insisted to name the representatives for the annexed east Jerusalem and the advisor for Arab affairs at the Israeli mayors office became the de facto holder of the East Jerusalem municipalities board membership.
Palestinian countered with strong leaders such as Ruhi Khatib, Ahmad Afif, Elias Freij and Anwar Nuseibeh to turn the company into a symbol of Palestinian nationalism and one of the key institutions of Arab east Jerusalem. Protests and demonstrations were held throughout the 1970s and 80s to defend the rights of the electricity company and to preserve its concession.
Israel tightened the grip on this national Palestinian company by restricting its ability to import electricity generating turbines, eventually the company gave up trying to generate its own electricity and became a redistribution company, buying the entire needed electricity from the Israeli National Electricity Co.
Problems of generating electricity would prove to be only one of the many problems. Israel insisted that settlers living in the Eastern occupied parts of the city needed to be serviced by the Israeli company directly. The encroachment on the company’s concessions continued in the same pace as the Israeli government’s settlement policy widened in more and more parts of Jerusalem as well as other West Bank areas that were outside the Jerusalem city limits.
The Jerusalem District Electricity Co. had to deal with yet another problem that of the Palestinian National Authority which has control over areas outside the Jerusalem city limits. Cities like Ramallah and Bethlehem and their outlying villages all fall within the company’s concession area. Over half a dozen Palestinian refugee camps also fall within the mandate of the company. Obviously any delinquency in payment of electricity bills would require the intervention of an executive power. The Palestinian police was barred by president Arafat from turning off people’s electricity bills and when the second intifada broke, Arafat issued clear instructions providing amnesty to those living in the refugee camps and promising that the PA will pay their bills instead.
The Jerusalem District Electric Co.’s debt started to increase due to the failure of the PA to pay those bills as well as the failure of major institutions in Jerusalem such as the Maqassed Hospital and Al Quds University.
The company’s debt also witnessed a major increase when the Israelis unilaterally decided to hike the cost of the electricity it is selling to the Jerusalem company. Obviously with the difficult economic situation it was next to impossible for the Arab-owned company to pass the higher costs on the Palestinian population.
Lack of payment is also rampant in yet a third area of the West Bank. According to the Oslo Accords the major populated cities are considered Area A while outside the major city limits the Palestinian police is not allowed to operate. Debt collection in Areas B or C is much more difficult if the collectors can’t rely on police. Israeli security forces which operate freely in these areas refuses to be involved in the ugly business of debt collection leaving yet another group of residents receiving electricity without paying for.
This fall when Palestinian President Mahmoud Abbas called for a UN vote for Palestinian statehood, the Israelis decided that they would punish the Palestinian Authority. The U.S. government asked the Israelis not to withhold the taxes and customs Israeli collects on its borders for products coming into the Palestinian Authority areas. These taxes amounting to about $110 million monthly provide a major part of the authority’s budget which goes primarily to pay public workers salaries. Trying to appear not to be ‘punishing’ the PA yet wanting to penalize it, the Israeli minister of finance decided unilaterally to pay part of the Jerusalem District Electricity Company’s debt by simply transferring on Dec. 12 the 435 million shekels (about $110 million) to the Israeli Electricity Co.
Unable to do anything about this Israeli action and with its employees not having paid for nearly two months, the Palestinian Authority negotiated a deal with local committees at the delinquent Palestinian refugee camps. On the final days of 2012 the Palestinian Authority agreed to cancel the electricity debts of these refugees on the condition that they agree to start paying their bills as of the 1st of January. One way to do that is the introduction of a system in which clients prepay their electricity in the same way you buy credit on a cell phone. When the money starts to run out the electricity gives out a signal and eventually stops. No need for any human intervention to shut off electricity.
The amnesty to the Palestinian refugees was not received well by the rest of the Palestinian population. Two days later on the first of January angry demonstrators in Nablus clashed violently with Palestinian security as they demanded to be treated like the refugee camps. Public servants in the West Bank have not been paid for nearly two months. The following day January 2nd the Palestinian Authority decided to cancel all electricity bills accrued before the end of year by residents or business throughout the West Bank. The cabinet decision’s only exception was for those being investigated for stealing electricity.
The Jerusalem District Electricity Co. is as strong as its clients allow it to be. With a population that is suffering politically, the idea of any enforcement to the collection process is difficult The ability to work in a complicated landscape require public support as well as regular enforcement powers. With competing powers and the areas under its concession of the company is ever so thorny, the fate of the company and the precious electricity it distributes will remain unsettled until the larger political and security issues between Israelis and Palestinians are resolved.