Ossian Smyth (Dún Laoghaire, Green Party)
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I thank the Chair and committee members for the invitation to speak today about the large energy user rebalancing subvention. The Minister, Deputy Eamon Ryan, was unavailable to attend today so I am deputising. He has asked me to pass on his apologies.

The large energy users rebalancing subvention refers to a 2009 Government decision to rebalance electricity network tariffs to support large energy users with effect from 1 October 2010. This decision was made at a time when the then global financial crisis and domestic banking crisis were both starting to take effect and the competitiveness of large Irish firms, together with the employment implications, were a serious policy issue. This decision was made to help safeguard jobs in some of Ireland’s most critical and export-orientated industries at a time when unemployment was rising at a fast rate. As part of the discussion today, we must bear in mind that when this decision was made in 2009, there were only roughly 1,300 large energy users in the State. That figure today is roughly 2,100 between large energy users and extra-large energy users. Of the top 65 large energy users at that time, 21 were indigenous and 44 were multinational firms. Of the 65 large energy users of the time, 21 were in the pharmaceutical sector, 11 in ICT and eight in cement, mining and refining, with the remaining 20 spread across the food and agriculture, education, timber and steel manufacturing sectors.

These companies represented jobs in our communities at a time when they were few and far between. While people today who hear "large energy user" may automatically jump to data centres, this was not the case back in 2009. As members can see, the top large energy users of that time mainly represented manufacturing and education sectors. In 2009, following engagement with the regulator on measures that could be taken to protect energy users, the Government made a decision to rebalance network charges in favour of large energy users. This was one of a number of measures and interventions which were taken at that time in support of households and businesses. The effect of the Government decision was that €50 million would be added to the domestic household network charges annually and the network charges of the large energy users would reduce accordingly.

At the time of the decision, there were 2 million domestic households and as such, the decision would have seen €25 added to each household's annual network charge. At that time, it had been highlighted to the Government that Irish electricity prices in respect of large energy users were high and were not in line with EU averages. On the other hand, domestic costs were below EU averages. In July 2009, the Government decision was conveyed by the then Minister for Communications, Energy and Natural Resources to the regulator, in a letter, a copy of which has been provided to deputies here today. While the Government decision outlined that €50 million was to be rebalanced in favour of large energy users, it was for the regulator to determine how this would be implemented. As Deputies will recall, at this time we were transitioning to an open and competitive electricity market, with independent suppliers starting to be active in the market and competing for business. In conveying the Government's decision to the regulator, the Minister acknowledged that some of the cost implications for customers could potentially be offset by switching electricity supplier.

The regulator implemented the rebalancing with effect from 1 October 2010, and it remained in place until its removal by the regulator in 2022. While the decision to introduce the rebalancing was made by the Government, it was for the CRU to keep network charges under review in the period that followed, and this is something which it did. In August 2021, the CRU commenced a review of the appropriateness of retaining the LEU rebalancing. This ultimately led to its removal and the discovery of the overcharging error, which are matters the representatives from the CRU and ESB Networks can talk to. This Government decision was taken in 2009, a very difficult period for our State, and since then the Irish electricity market has evolved. Today we are on our way towards an electricity system in 2030 in which 80% of electricity demand will be met by renewable resources. I trust this has been of assistance and am happy to answer questions members may have regarding the decision to introduce the large energy users rebalancing subvention.