Millions face 5% electricity price hike as tax kicks in

SEVERAL MILLION domestic and business users of electricity will be paying almost 5 per cent more on their bills from today due to the imposition of a levy designed to fund wind power and subsidise inefficient peat-fuelled generating stations.

The 4.9 per cent increase, due entirely to the public service obligation (PSO) levy, is going ahead despite widespread calls for it to be delayed because of financial hardship faced by so many households. The increase, which applies to customers of all electricity providers, amounts to an additional €2.73 on bills each month.

Minister for Energy Eamon Ryan has defended the price hike but said he would re-examine the level of support given to subsidising inefficient peat-fuelled generating stations. This accounts for most of the cost of the levy.

The Commission for Energy Regulation, which sets energy prices, pointed out that this was the first increase in electricity prices in over two years but added that it had “no control” over the levy, which was the result of Government legislation and contacts with the energy industry.

Fine Gael, Labour and groups representing the elderly have called for the levy to be postponed. The ESB is currently disconnecting more than 2,000 households a month because of non-payment of bills.

Separately, the Joint Oireachtas Committee on Social Protection yesterday appealed to the ESB and Eircom not to introduce a €20 minimum for bill payments made through An Post. Eircom is introducing the new rule from today while the ESB is considering a similar requirement from next year.

Eircom said it was introducing the measure because An Post was 75 per cent dearer than the next most expensive payment method. A spokesman said the change wouldn’t cost customers anything and would not apply to anyone on an existing household budgeting scheme with An Post.

Bríd Horan, executive director of ESB Networks, told the Committee on Communications, AND Energy this week that the costs to the ESB of receiving An Post payments were very high but the numbers using this option were declining. Also from today, the business sector of the electricity market is being deregulated.