Pat Rabbitte (Dublin South West, Labour) | Oireachtas source

I share the Deputy's concerns, and I expressed them at a meeting with the regulator and subsequently put them in writing. When one considers the three elements of the PSO, the largest element of cost is attributable to the peat stations in the midlands. It would not be viable to maintain employment in the midlands, such as among Bord na Móna workers, without the PSO.

Deputy Penrose will be interested to know that the Edenderry power station will cease to receive compensation from the levy from the end of 2015. Given that it is due to receive €20.6 million, it is a significant factor, although it is not as significant as the contract running out next year with Tynagh and Aughinish. For 2014 and 2015, Tynagh and Aughinish account for €77.6 million of the levy. That was a ten-year contract entered into by the then Government in 2005, and as I noted in my formal remarks, the country was then on a knife edge at the height of the boom with regard to energy security. We are now heading into the last year of that contract, and that is a large element.

Deputy Penrose is correct about forward purchase contracts. The public service obligation, PSO, increases when the wholesale price comes down and in those circumstances large energy users should be able to arrange forward purchase contracts to take advantage of the fact that wholesale prices have decreased. In any event, the PSO as we have known it is in the final straight. Edenderry will be affected from the end of 2015 and the legacy contracts with Tynagh and Aughinish have one year left to run.

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