James Browne (Wexford, Fianna Fail) | Oireachtas source

My colleagues, depending on time.

I welcome the opportunity to contribute on the Energy Bill 2016. I congratulate the Minister on his appointment. He has settled in, but I have not had the opportunity to congratulate him before now. I broadly support the Bill, particularly the part that gives greater enforcement and sanctioning powers to the Commission for Energy Regulation, CER. To date, private and retail consumers have been ripped off by high retail energy prices. The consumer has not been getting a fair share of wholesale price cuts. Average oil and gas prices are at historical lows, with a 35% decrease in Irish wholesale electricity prices and a 45% decrease in wholesale gas prices, but the consumer has seen only minimal cuts. We need greater enforcement to ensure more fairness for domestic and retail consumers. While some reductions have been announced in recent weeks, they are not sufficient. The energy regulator's recent proposal to increase the public service obligation, PSO, by 36% would effectively wipe out these savings. It would see domestic energy bills increased by as much as €90 per year when VAT is taken into account. The PSO is subject to VAT, which is effectively a tax on a tax. While the original purpose of the PSO was a worthy one, it is a flat tax that lacks fairness and affects struggling families. The proposed increase, added to others, equates to a 400% increase in the PSO levy in just five years.

I support renewable and sustainable energy, but the levy seems to have little relevance any more to green energy and is instead a stealth tax worth €450 million per year to the Exchequer. As a flat tax, it makes a disproportionate contribution to the energy bill, and customers who are use-conscious have little incentive to reduce their usage, as any reduction results in little saving, given the high level of fixed charges. We have the third highest electricity prices in Europe, and the fixed nature of the PSO levy disproportionately affects the poorest. Perhaps it is time to review the levy's effectiveness and, most importantly, fairness.

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