Electricity cost to rise by €205m due to levy increase

Households could pay €3.48 extra a month in public service charge

Electricity customers in the Republic pay a public service obligation levy designed to pay for Government-approved supports given to green-energy projects, peat-fired generating plants, Tynagh Energy and Aughinish Alumina (above).

Electricity customers in the Republic pay a public service obligation levy designed to pay for Government-approved supports given to green-energy projects, peat-fired generating plants, Tynagh Energy and Aughinish Alumina (above).

 


Consumers and businesses will pay an extra €205 million for electricity from next October under plans to increase the public service levy charged by the State’s energy regulator.

All electricity customers in the Republic pay a public service obligation (PSO) levy, designed to pay for Government-approved supports given to green-energy projects, peat-fired generating plants and two private companies – Tynagh Energy and Aughinish Alumina – that have special power supply contracts with the State.

According to a consultation paper published in recent days, the Commission for Energy Regulation (CER) is proposing to increase these supports from October.

The plan will result in consumers and businesses paying an extra €205.6 million for their electricity over the succeeding 12 months, an increase of more than 50 per cent on the charge levied last year.

Under the proposals, the PSO levy on each household in the Republic will be €41.80, or €3.48 a month over the 12 months from October. They are currently paying €2.32 a month.Small businesses will pay €126 or €10.50 a month from a current rate of €7.14.

The regulator does not give a monthly breakdown of the levy that will be imposed on what it classes as large energy users such as hospitals and key industries such as pharmaceuticals and IT, but they will contribute €98.6 million of the total.

Consumers will pay €84.75 million while small business will contribute €22.25 million.

The PSO is revised every October and is designed to bridge the gap between the cost of guaranteed prices paid to the generators covered by the scheme and what the regulator predicts will be the actual market price of electricity.


CER proposals
Under the CER’s proposals, wind farms and other green energy generators will receive a total of €65.7 million. Aughinish and Tynagh will receive €61.2 million.

The three peat-fired plants in the Republic, Edenderry, West Offaly and Lough Ree, will get a total of €76 million, with more than €64 million of this total split between the first two.

A key driver of this year’s proposed increase is a €42 million “R-factor”, which the CER explained is basically a revised charge designed to make up for the fact that the amount collected under PSO fell short of projections in 2011/12.

A CER spokesman pointed out that while the regulator decides on the rate and collects it, the PSO charge is a result of government policies.