Written answers

Tuesday, 13 October 2009

Department of Communications, Energy and Natural Resources

Energy Prices

12:00 pm

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context

Question 434: To ask the Minister for Communications, Energy and Natural Resources the efforts he is making to bring about a reduction in energy prices throughout the economy; if he has given any instructions to or received any communication from the regulator in this regard; and if he will make a statement on the matter. [35867/09]

Photo of Eamon RyanEamon Ryan (Dublin South, Green Party)
Link to this: Individually | In context

The regulation of ESB customer supply electricity tariffs and BGÉ gas tariffs is the statutory responsibility of the Commission for Energy Regulation (CER) under the Electricity Regulation Act 1999 and the Gas (Interim) Regulation Act 2002. The CER has exited from the regulation of tariffs for large energy users. In the electricity sector more than 90% of business has switched to the independent electricity suppliers. In the gas sector around 88%, in volume terms, of business has switched to the independent gas suppliers. Approximately half of these large commercial customers are on variable tariffs. As a result the substantial reductions in wholesale electricity and gas prices are already being reflected in their tariffs.

The CER is statutorily independent in the performance of its duties. However, there is regular communication between my Department and the CER. All electricity users benefited in 2009 from direct subsidies totalling €567m. These were made up of an ESB rebate to consumers of €315m, a repayment of certain Public Service Obligation (PSO) levies of €87m and the deferral of some network revenues until after October 2009.

In July the Government agreed that these subsidies will continue for large energy users at their current level until October 2010 and will then be phased out over the following two year period. This will benefit and in some cases will see businesses paying up to 40% less for electricity compared with what they were paying in 2008. I welcome the fact that the CER lowered electricity prices for all customers by 10% and gas tariffs by an average of 12% for domestic and SME gas customers from May 1st 2009. I also welcome the CER's most recent pricing decision, which approved an average decrease in gas tariffs of 9.8% with effect from 1 October 2009, with no change in electricity tariffs for domestic consumers. The decrease was made possible by the downward shift in recent months in wholesale gas prices.

It should be noted that major savings, in excess of these sums, are also available to domestic electricity consumers who decide to switch electricity suppliers and more than 10% of customers have availed of these opportunities so far. In addition, there are a number of concrete actions that any customer can take to reduce their electricity consumption and hence their electricity bill as advised by Sustainable Energy Ireland (SEI) and reinforced by the "Power of One" campaign. Small to Medium businesses will also see further reductions in their bills of 5.5% from this month as the new CER tariff decisions come into effect and deliver further benefits to business.

The CER has also recently announced that the PSO Levy will be zero for 2009/2010. The PSO is the mechanism through which we support the security of our energy supplies and the development of wind and peat power in Ireland. A zero PSO means that we are lessening our dependence upon fossil fuels without burdening business or electricity consumers with any additional costs. Taken together, these actions will benefit all consumers of energy, including both large energy users, SMEs and domestic consumers, by significantly reducing the level of energy costs they would otherwise face in 2009\10.

Comments

No comments

Log in or join to post a public comment.