The Haifa District Court ruled that Noga - Independent System Operator Ltd. is entitled to begin immediately offsetting funds up to a cumulative amount of NIS 75 million, as part of the legal proceedings conducted against PSP Investment Ltd.
The proceedings address payment demands issued by Noga totaling approximately NIS 150 million following significant deviations from the benchmarks set by the Electricity Authority, stemming from the shutdown of the pumped-storage facility and the failure to provide the required level of facility availability during 2022 and 2023. The payment demand was formulated following a comprehensive and professional audit and review process conducted by Noga.
As part of the proceedings, PSP requested a temporary injunction that would prohibit Noga from offsetting the debt amount from funds due to it through its activities in the electricity market. The court denied the request, allowing Noga to immediately begin executing the offset for approximately 50% of the demanded debt amount.
The court further ruled that the payment demand was not issued immediately or arbitrarily, but rather after lengthy and professional staff work, during which Noga examined activity data, analyzed the implementation of the benchmarks, collected data, and performed comprehensive checks over an extended period. The payment demand was formulated only after all checks were completed.
The offset mechanism: The money will return to the public
In accordance with the court decision, Noga will be entitled to offset up to NIS 5 million per month, up to a cumulative amount of NIS 75 million, with immediate effect.
In accordance with settlement mechanisms in the electricity market, the collected funds do not remain with Noga but are returned to the electricity sector for the benefit of all electricity consumers, thereby potentially contributing to a reduction in the public electricity tariff.
Regarding the remainder of the debt, totaling approximately NIS 75 million, the court ordered temporary relief under which no offset may be executed at this stage, pending a final ruling on the lawsuit.
Reactions of the parties: Noga welcomes decision, PSP to appeal
Noga stated: "We welcome the court decision, which accepted Noga's position and allowed the company to immediately begin collecting a significant portion of the debt. As a government company managing the electricity sector, Noga works to encourage competition, support electricity producers, and introduce new players to the energy sector. Alongside this, we have a duty to ensure that all players act in accordance with standards, market rules, and legal provisions, while maintaining equality, public trust, and the public interest. The funds collected through market mechanisms ultimately return to the electricity sector and for the benefit of all electricity consumers. The payment demand was formulated after lengthy, thorough, and professional staff work and in accordance with the benchmarks set by the Electricity Authority. Noga will continue to act responsibly, transparently, and in accordance with the law, to protect the public interest and to exercise its full rights in the legal proceedings."
PSP stated: "We intend to file a motion for leave to appeal to the Supreme Court as well as a motion for a stay of execution, and if PSP's claim is accepted, Noga will be required to return all amounts it offsets. Noga's calculation is rife with errors, and even within the legal proceedings, Noga admitted that these are merely estimates based on numerous assumptions. As the owner of a significant facility in the electricity market, PSP has always acted and will continue to act in accordance with benchmarks and legal provisions."