Alex White (Dublin South, Labour) | Oireachtas source

That is okay, it is just for the record. The levy is designed to compensate electricity suppliers for the additional costs they incur by purchasing electricity generated by PSO-funded producers. The PSO levy is vital to enable Ireland meet its 40% target for electricity generated from renewable sources by 2020, which in turn is important for the achievement of Ireland's 16% EU 2020 target for renewable energy.

The Commission for Energy Regulation determines the PSO levy, which is a charge on all electricity customers without exception. The legal basis for the PSO levy and its method of calculation are set out in regulations made under the Electricity Regulation Act 1999. The annual levy amount for 2014-15 is €335.4 million. This equates to €64.37 per annum for residential customers, €221.66 per annum for small to medium-sized business customers and €34.20 per kilovolt-ampere, kVA, for medium and large customers.

The biggest driver for the levy rise for this year is the lower predicted wholesale market electricity price, which is currently estimated to be approximately 10% lower than last year. This results in lower predicted market income for the plants. In other words, if the wholesale price falls, the plants involved get less for what they are selling. Consequently, there is a lower predicted market income for those PSO plants and therefore, a higher levy is required to cover their allowed costs.

The lower wholesale electricity price is currently being driven by lower international gas prices which we have seen since spring of this year. If these lower gas and wholesale prices are sustained, it will reduce the wholesale cost of electricity that suppliers pay. It is a bit complicated. I might come back to it later.

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