Billy Timmins (Wicklow, Fine Gael)
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Question 584: To ask the Minister for Communications, Marine and Natural Resources the purpose of the public service obligation charge on ESB bills; the rates of the domestic and commercial charges at 1 September 2005; the charge at 1 September 1997; the amount of funding which has been collected under this charge for the years 1998 to 2004 inclusive; the use to which this funding is put; and if he will make a statement on the matter. [25758/05]

Noel Dempsey (Meath, Fianna Fail)
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The opening of the electricity market to competition has meant that, in order to create a level playing field between all market participants, the Government's public service requirements need to be transparently identified and costed. ESB has in the past been obliged to provide these services.

In pursuance of its energy policy objectives of security of supply, fuel diversity, environmental protection and the use of indigenous energy sources, the Government has identified certain public services that it requires ESB, in its function as public electricity supplier, to continue to provide in a liberalised market.

These public services relate to the provision of peat-fired generation, renewable-alternative generation and peaking capacity, for reasons of security of supply and environmental protection, in accordance with article 3(2) of the EU Electricity Directive, and section 39 of the Electricity Regulation Act 1999.

In providing these public services, ESB incurs extra-competitive costs given that, unlike gas, both peat and renewable energy sources are not competitive forms of electricity generation. Therefore, these additional costs over and above the costs of a best new entrant are recouped by way of a levy on all electricity customers.

The implementation of the PSO levy commenced on 1 January 2003. Therefore, no PSO levy was charged up to that date. With regard to specific charges imposed on different customer categories, the following table shows the monthly PSO charge on all electricity customers' bills for the year 2005.

Table 2 below details the monthly PSO charges for 2006 for comparison.

The PSO levy for each year since its implementation on 1 January 2003 is listed in the following table.

All moneys collected under the PSO levy go to achieving the objectives of the PSO; the main objectives being to ensure reasonable self-sufficiency in electricity generation capacity by utilising peat as a primary fuel source, to promote renewable energy sources to help protect the environment and to cover the cost of generation capacity that is needed to ensure that customers' demand can be met in times of peak demand.

To achieve these objectives the projects that have been supported by the PSO to date are: alternative energy requirement contracted projects, ESB power generation peat stations, Edenderry Power Limited's peat plant and peaking plant.