The rate base is a group of basic assumptions used to calculate the long-term price of electricity production, conduction and delivery, and serves as the foundation for setting the electricity tariff. This includes a basket of normative costs for each branch of the electricity sector that the electricity tariff is supposed to cover. For example, the cost of the construction of a power station and the cost of fuels (for the generation sector); the cost for the construction of the grid (for the transmission sector) or the cost of setting up a transformation station and services offered to the public (for the distribution sector). The rate base was first set in Israel by the Public Utility Authority-Electricity in 1997 for 5 years and was then updated in 2002. In February 2010, the PUA approved the new tariff structure for the years 2010-2014, which will include a 10% reduction in electricity tariff for households and a 16.3% reduction for industrial users