Richard Bruton (Dublin North Central, Fine Gael)
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Question 130: To ask the Minister for Communications, Marine and Natural Resources the basis of the levies which are placed on ESB bills; the precise purpose of the money raised; the aggregate amount raised per annum over the past twelve months and projected over the next five years; and if the VAT collected on this levy is also diverted to the specified obligation or if it is a source of double taxation. [9703/06]

Noel Dempsey (Meath, Fianna Fail)
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I understand that the Deputy is referring to the public service obligation levy which is payable by all final customers of electricity. The imposition on the ESB of public service obligations is provided for by section 39 of the Electricity Regulation Act 1999. The section provides that the Minister shall by order direct the Commission for Energy Regulation to impose on the ESB, or other persons referred to in the section, public service obligations which may include obligations in relation to: security of supply; regularity, quality and price of supplies; environmental protection, including energy efficiency and climate protection, and use of indigenous energy sources.

In accordance with the Electricity Regulation Act 1999 (Public Service Obligations) Orders, public service obligations have been placed on the ESB concerning the availability of electricity produced using indigenous peat, electricity produced using renewable, sustainable or alternative forms of energy and electricity produced using peaking generation units.

In accordance with the provisions of section 39, the orders provide for the recovery, by way of a levy on final customers, of the additional costs including a reasonable rate of return on the capital represented by such costs, where appropriate, incurred by the ESB in complying with the orders. The levy is estimated, calculated, adjusted, collected, monitored, certified, accounted for and paid in accordance with the provisions of the orders. The commission is responsible for the computation of the basis of the amount of levy payable in each year and for the approval of the procedures for the collection and payment of the levy amounts. The commission has provided the following information in relation to the charges in respect of each customer category in 2005 and 2006 and the total amount of the levy for each year since 2003.

Concerning the levy amounts projected over the next five years, the commission states that the levy amount is highly dependent on the wholesale market price of electricity, and consequently on world d fuel prices. Accordingly, the commission is of the view that it would be extremely difficult to predict the amounts to be recovered through the levy for the years in question.

The application and collection of VAT is a matter for the Revenue Commissioners. The information provided by the commission set out in tables 1, 2 and 3 above does not include VAT.