Willie Penrose (Longford-Westmeath, Labour) | Oireachtas source

I thank the Minister for his comprehensive reply. I am acutely aware of the reason for the levy but we cannot continue to foist charges on industrial and domestic consumers. If the estimated wholesale price of electricity in the all-island market falls by 9% or 10%, the savings should be passed on to the consumer and end user but there is a peculiar anomaly in that, as the Minister pointed out, lower wholesale prices result in plants needing additional PSO subsidies to cover their costs and offset the smaller amounts they will receive on the market. This applies across the board both for renewables and peak energy security and supply. That is the biggest single driver of the increase in the proposed levy. The estimated wholesale price for the next year may be reflected in monthly trends of lower spot and forward prices in the single energy market but in a normal market when a company's revenue declines it seeks to offset the losses by lowering input costs and engaging in cost reduction strategies. Has the Commission for Energy Regulation carried out an investigation to ensure this occurs and, if so, can it provide proof that it has carried out such an exercise and who is overseeing value for money?

The Minister made a strong argument but it can be countered by the fact that many large energy users purchase energy in advance rather than on a day-to-day basis. If a company has contracted forward until the end of 2015 or 2016, short-term energy decreases will not be of benefit. We are in a new environment and we have to review how it operates. Electricity costs are a major factor in competitiveness, as the Minister is aware. A Forfás report focused on this issue. It is not sustainable to increase a levy by 250% over four years.

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