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Public Service Obligation Levy

Dáil Éireann Debate, Wednesday - 7 October 2020

Wednesday, 7 October 2020

Questions (29)

Cian O'Callaghan

Question:

29. Deputy Cian O'Callaghan asked the Minister for Environment, Climate and Communications if his attention has been drawn to concerns the impact of a 130% increase in public service obligation levy will have on households of reduced socioeconomic means; his plans to support households that may not be able to afford an increase of this magnitude; and if he will make a statement on the matter. [29148/20]

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Written answers

The PSO levy has been in place since 2001, and is a charge on all electricity customers without exception. It consists of a set of support schemes designed to facilitate national electricity policy objectives for renewables and security of supply. From a policy standpoint, the PSO has been and will continue to be a vital policy support for the development of renewable electricity and to enable Ireland to reach EU renewable energy targets and our own national energy and climate targets. Under the PSO legislation, the calculation of the Levy is strictly a matter for the Commission for Regulation of Utilities, the independent electricity and gas regulator. The legal basis for the PSO levy and its method of calculation are set out in regulations made under the Electricity Regulation Act 1999 and the Public Service Obligations Order 2002 (S.I. 217 of 2002) under which the CRU is assigned responsibility for calculation of the levy each year. The methodology for determining the PSO levy charge is set out in Public Service Obligations Order 2002 (S.I. 217 of 2002).

The CRU’s decision on the PSO for 2020/21 will result in an increase in the PSO for households of €3.68 per month. 

As regards impacts on households of reduced means, I am acutely aware of the financial challenges faced by households during these exceptional times. Government provides extensive supports for household energy costs via welfare schemes and energy efficiency grants, with specific schemes aimed at those at risk of energy poverty. Welfare supports include the Household Benefits Package and the fuel allowance, both operated by the Minister for Employment Affairs and Social Protection, which provide a set of allowances to help with the costs of running household energy costs.Improving the energy efficiency of a home also represents a significant opportunity for consumers to reduce their energy costs. Energy efficiency upgrades are provided free of charge to households at risk of energy poverty mainly through the Warmer Homes scheme, operated by the Sustainable Authority of Ireland (SEAI) on behalf of my Department. In 2020 the budget allocated is €52.8 million, largest ever budget allocation for the scheme.

The PSO is only one part of the total electricity bill. The CRU emphasises that savings on the variable aspect of the electricity bill can be gained through switching electricity supplier. All supply companies offer competitive deals to customers who switch or engage with their suppliers. Data from approved price comparison websites, Bonkers.ie, Switcher.ie and Powertoswitch.ie, approved by the Commission for Regulation of Utilities, exist to assist consumers to switch; for example as of 6 October 2020, consumers could save up to €307 annually, depending on the tariff they are on, by switching suppliers.  This could help mitigate the increase in the PSO.

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