Consumers facing higher electricity bills as PSO levy to rise
Published 29/07/2016 | 15:44
HOMEOWNERS and businesses are facing higher electricity bills after a decision to raise the levy on their bills to support renewable energy and to ensure security of energy supply.
The Public Service Obligation (PSO) levy is to go up by 20pc, the Commission for Energy Regulation has decided.
The move will mean the levy on domestic bills will rise by almost €14 to €82 a year, once value added tax is applied, according to calculations by Simon Moynihan of Bonkers.ie.
For commercial electricity users, the levy is going from €214.5 this year to €254.16 - an increase of €39.66, or 18.5pc. This figure excludes VAT as business can reclaim the tax.
Mr Moynihan said: “The energy regulator had initially proposed an increase of 32pc in May, so there is some relief with today’s news.”
The higher levy will apply from October.
The PSO levy is a subsidy charged to all electricity customers to support national policy objectives related to renewable energy, indigenous fuels (peat) and security of energy supply
The higher levy is despite a 35pc drop in wholesale gas prices, the main input for electricity generation.
Lower wholesale energy prices mean that more financial support has to be paid to ensure security of electricity supply.
Meanwhile, a separate report from the energy regulator shows that almost 80,000 customers have switched electricity supplier and 25,000 customers have switched gas supplier since last year.
It said while customer switching continues to be a key indicator of competition, an increasing number of customers are negotiating better terms and prices with their existing suppliers.