I thank the Deputy for his kind words and I look forward to a fruitful relationship with him, the Opposition spokespersons and all Members of the House. I also join him in paying tribute to my predecessor, Deputy Rabbitte, for his stewardship in this role, and the former Minister of State, Deputy O'Dowd.
I am acutely aware of the financial challenges faced by families and businesses as a result of high electricity prices. However, it is important to note that the electricity and gas markets are commercial, liberalised and competitive, and operate within national and European regulatory regimes. As Minister, I have no statutory function in the setting of electricity prices. Responsibility for electricity and gas market regulation is a matter for the Commission for Energy Regulation, CER, which is an independent statutory body.
At a national level, the competitive energy market in place results in choices for consumers and businesses in terms of suppliers, products and prices. Such competition places downward pressure on prices. Consumers can seek to mitigate rising electricity prices by shopping around, and measures such as comparison websites, approved by the CER, exist to assist them. They can and should shop around to get the best possible price and service deal from suppliers.
The CER is focused on actions that can mitigate costs for business and domestic customers, including rigorous regulatory scrutiny of the network costs component of retail prices. Households can reduce their energy costs by being energy efficient. Indeed, there are energy efficiency measures to assist business and domestic energy consumers, with significant funding allocated to them. The energy efficiency fund, announced in February 2013, funds specific measures, including projects in the public and commercial sectors. In addition, the Sustainable Energy Authority of Ireland, SEAI, administers a number of grant schemes for homes under the better energy homes scheme, as well as assisting businesses.
The public service obligation, PSO, levy has been in place since 2001 and is the overall support mechanism for generation constructed for security of supply purposes, including the security of supply provided by using indigenous peat for electricity generation. The PSO also provides the support mechanism for the development of renewable electricity. The levy is designed to compensate electricity suppliers for the additional costs they incur by purchasing electricity generated by these producers.
The greatest driver for the proposed levy increase for 2014-15 is the lower predicted wholesale market electricity price, currently estimated to be some 10% lower than last year. This results in lower predicted market income for the PSO plants, which means a higher levy is required to cover the allowed costs. Lower wholesale electricity prices are currently resulting from the lower international gas prices evident since the spring. If these lower gas prices are sustained for the coming months, they should help to reduce the wholesale cost of electricity paid by suppliers and, in turn, enable suppliers to reduce their retail prices.