‘It must be paid back’ – row erupts as ESB drags heels over €50 refund to households

“ESB will do that directly to their customers,” he said. “Where you find out there was an overpayment, you pay it back, and that’s what’s going to be done.”

The refund would be worth about €50 to every household, according to estimates.

The ESB wants to raise the money through charges on big businesses such as pharmaceutical firms, tech companies, food producers and data centres. Those companies enjoyed lower energy bills at the expense of households, which were charged more to subsidise them.

Tapping those firms cannot happen without sign-off by the energy regulator, the Commission for Regulation of Utilities (CRU), and it does not intend examining the matter until April with a view to completing its assessment by October.

Such a move would be opposed by business. Large companies lobbied the CRU last year to retain their lower energy bills, claiming they would go out of business if they were not subsidised.

It would also probably run into opposition from within government.

The Department of Enterprise, under Leo Varadkar, also complained to the CRU last year when the subsidy’s removal was proposed.

Tensions around the issue have grown over the past week after the overcharge was revealed.

The subsidy, known as the Large Energy User Rebalancing Subvention, was already controversial as it was introduced in 2010 to support big businesses during the recession, but was continued until last year.

Households’ electricity bills were increased by €50m a year so €50m could be shaved off the bills of large energy-using companies.

Around 1,500 companies were categorised as large energy users at the time, so the subvention was worth an average of €33,300 each, every year for 12 years – a total of €600m.

It has since emerged that the ESB wrongly applied the measure, taking an extra, unsanctioned €100m off householders at a cost of about €50 each, which must now be repaid.

Neither the ESB nor the regulator publicly disclosed this, despite the ESB admitting this week it had been engaging with the regulator on the issue “for some time”.

Mr Ryan, who said he was not told of the issue until recent days, said the mistake was understandable.

“It’s a very technical issue,” he said.

He added that it would be too difficult to try to get the money back from large energy users.

Sourcing the money to repay customers is further complicated because ESB is a state-owned company.

If it uses its own finances for refunds, it could dramatically reduce the dividend it will pay to the Exchequer this year – money that is used for public services.

The company would not comment on the minister’s remarks, saying only that it was continuing to engage with the CRU on the matter.

The CRU would not comment either, saying the issue was “required to be processed through the annual networks revenue process that is due to begin in April”.

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