Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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5. To ask the Minister for Communications, Energy and Natural Resources if he will provide a detailed explanation of what is being done with the revenues generated by the public service obligation charge on gas and electricity bills; the amount of money being generated by this charge; and if he will make a statement on the matter. [40483/14]

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The Minister can see there is a theme to all my questions today on the area of renewable energy.

Alex White (Dublin South, Labour)
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Yes, I had noticed that.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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This particular aspect relates to the public service obligation. As the Minister is aware, there is much anger about sneaky, regressive charges imposed on people in respect of property, parking, water or whatever. I seek detailed information about what is actually happening to the public service obligation levy of €64 per annum that is imposed on people's electricity bills. The levy increased by 50% this year, which is another burden on many hard-pressed families. Where is the money going because it is increasing the cost of living for people? I acknowledge the need to meet our sustainable energy targets but I have concerns or suspicions about where this money is going and whether it is being used in the best way to develop renewable energy and a secure energy supply for this country.

Alex White (Dublin South, Labour)
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While a healthy scepticism is always important, in this case I believe being suspicious is going a little too far. However, I thank the Deputy for the question and will explain to him as best I can. The public service obligation, PSO, levy has been in place since 2001 and is the overall support mechanism for electricity generation constructed for security of supply purposes, including peat generation, and for the development of renewable electricity. It is levied on electricity customers only and there is no PSO levy associated with gas bills.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I apologise; that was a mistake.

Alex White (Dublin South, Labour)
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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.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I need to study the Minister's answer carefully, and I can see it contains quite a lot of detail. What I want to know is the extent to which this money is being used to subsidise private companies. There are many aspects to the anger around Irish Water but one aspect is that money out of people's pockets could be going into the pockets of highly paid executives and consultants and into what is legally a private entity which might be privatised further down the road. Essentially, we are subsidising making other people very rich. I want to know if that is happening with the public service obligation levy. Is the money going into the pockets of private companies? How much of it is going into the pockets of private companies? What are they doing with the money? Is it being used to pay people exorbitant salaries, big bonuses and God knows else and to make other profits for the shareholders in private companies? I want to know that detail. Can the Minister give us information on the companies that are getting it?

Michael Kitt (Galway East, Fianna Fail)
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I will come back to the Deputy.

Alex White (Dublin South, Labour)
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It is in the nature of a subsidy because if the prices these plants can obtain in the wholesale market for their product go down, they have been given a guarantee that the price will be kept at a certain level. We do that for a public interest reason, not just to put money in the pockets of independent commercial people but to ensure we keep up our production of renewables in the country. There is a public interest in doing that. They are private companies. The Deputy can describe it as a subsidy to private industry. I cannot disagree that that is what it is, but it is done for a public interest, which is to ensure the particular plants we want to see operating and the renewables we want to see produced actually happen so that we can keep to our targets, reduce our dependence on fossil fuels and increase our dependence on renewables. That is one of the reasons. It is true that these are private companies but the State does not run industry in this country. Obviously, we have the ESB, which is a hugely successful commercial semi-State company, but for us to vindicate the public interest, for example in regard to renewables, we must have this subsidy system in place, and we have had it in place since 2001.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Exactly. We have the ESB, Coillte and Bord na Móna, all of which are hugely successful, and we at least have some capacity to have oversight of those, although I believe we need more, but what oversight is there of private companies? There is fury and anger over the bonus culture in Irish Water, the salaries of its chief executives, the potential that we are subsidising a private company and so on. The Minister is aware of the anger about that. What is going on with €300 million of public money coming out of people's pockets? To whom is it going? Is there any oversight of the way it is being spent? Is this the best way to do it rather than through our own semi-State companies that we own, where all the benefit and value comes back to us and over which we have some real oversight? There have been allegations of political cronyism, particularly in the area of the wind turbine business, that people are in senior positions in that business who have political connections to the Government parties. We need transparency on this and I want to know who the companies are, the mechanisms that are in place to make sure this money is not just being put into consultants' pockets or going towards the payment of big salaries, bonuses and so on. Can we get detailed information?

Alex White (Dublin South, Labour)
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I have no political connections with any of the companies-----

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I am not saying the Minister does.

Alex White (Dublin South, Labour)
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-----and I am not aware that my party or any of the parties in government have such connections. I can give the Deputy a table - there is no point in reading it out here - of different entities and bodies that benefit from the public service obligation, PSO, contract and the various relevant figures for 2014 and 2015, and for 2010, 2011 and 2012. I have that in front of me and can furnish the Deputy with it.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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On the question of oversight.

Alex White (Dublin South, Labour)
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These are essentially price guarantees. I come back to my earlier point. There is a public interest in ensuring we produce renewables and that this occurs in our system. Effectively, it is a price guarantee. The oversight the Deputy is calling for is to ensure the money that comes out of the fruits, so to speak, of the PSO achieve what it needs to achieve, and I am satisfied that it does. I am satisfied that this does no more than what it says on the tin, which is effectively to be a price guarantee for these companies. It is another issue. We could have a general debate about private sector bad, public sector good, and I am always interested in participating in it. We will not nationalise all of these companies, much as the Deputy might like us to do. That is not realistic, but we can have the debate. I welcome the Deputy raising this issue.

Michael Kitt (Galway East, Fianna Fail)
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We have to make some progress so I am moving on to Other Questions.