Simon Coveney (Cork South Central, Fine Gael)

The challenge for the Minister is that he will need to find other ways of bringing electricity prices down to balance the inflationary impact of PSO payments. The way to do so is to examine other elements of electricity bills such as network charges.

Amendment No. 8 is slightly different from one I tabled on Committee Stage which was ruled out of order. It proposes to allow the Minister to determine by ministerial order any rate of levy that may be payable by a peat-powered plant or others subject to PSO payments. I saw it as a reasonable compromise between our two approaches.

All generators, including peat-powered stations, have been given free carbon allowances until the end of 2012. After then, they will have to purchase carbon credits for their emissions. The whole purpose of this legislation is to ensure generators do not charge consumers for something they are already getting for free while preparing the marketplace for a real carbon trading market. That is why it is preferable for the next two years to have visible evidence that consumers are paying for carbon emissions even if the moneys are taken back again through the PSO. I accept in the case of a peat-powered plant more would have to be paid in the PSO for carbon costs that could be taken back as a levy and redistributed responsibly.

The argument that introducing a cost for carbon reduces the gap between what is subsidised by a PSO and the normal market price is false economics, particularly if we start pretending the PSO is less because we are not applying a carbon levy. We are pretending we are getting a bit more value for money than we actually are.

I understand the social and regional economic arguments, as well as the security of supply arguments, around peat as a power source in Ireland. It is a sensitive issue that needs to be dealt with appropriately. My amendment seeks to introduce transparency so that everyone will know how much they are paying and for what rather than pretending there is not a cost for carbon in PSO plants.

However, I understand where the Minister is coming from. I am sure there are plenty of people in my party who would be uncomfortable with me unnecessarily pushing this issue as it may give the impression we are looking to push up the PSO levy on peat-powered plants. I believe, nonetheless, we are pretending an issue does not exist when it does.

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