Joe McHugh (Donegal North East, Fine Gael)
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Question 1559: To ask the Minister for Communications, Energy and Natural Resources if he will reconsider his decision to impose a 5% charge on ESB bills in view of the financial difficulties it imposes on families; his views on the charge in the context of rising unemployment and interest rates; and if he will make a statement on the matter. [33064/10]

Eamon Ryan (Dublin South, Green Party)
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The changes in the regulated electricity prices for domestic consumers from this October are attributable to the re-introduction of the Public Service Obligation (PSO) Levy due to the decline in gas prices. The key elements of this levy, which supports renewable and indigenous peat generation, were first put in place in 2001. The Levy was set at zero for the years 2007, 2008 and 2009 as a result of high gas prices. The PSO Levy in 2010/11 will mean a fixed annual charge of €32.76 per domestic consumer, equating to an additional €2.73 per month.

The methodologies for calculating costs and the timing of decisions are underpinned in secondary legislation in the Electricity Regulation Act 1999 (Public Service Obligations) Order 2002 (S.I. 217 of 2002). I have no discretion in this regard. The PSO levy is designed to compensate electricity suppliers for the additional costs they incur by purchasing electricity generated from indigenous (i.e. peat), sustainable and renewable sources. In short, it is the method through which security of energy supplies and the development of renewable electricity in Ireland is supported, in line with the Government's energy policy objectives and Ireland's binding EU renewables energy target for 2020.

Any price increase, however unavoidable, adds to the difficulties of many consumers in the current environment. However, significant savings are available to domestic consumers who simply switch their electricity supplier. Although approximately 600,000 customers have switched to date, up to 70% of customers have yet to avail of discounts of between 10-14%, which would more than outweigh any new PSO Levy costs.

Customers can also help mitigate energy costs by taking advantage of a wide range of Government supported energy efficiency programmes. Funding in 2010 of €90m has been allocated to the Sustainable Energy Authority of Ireland (SEAI) for the continued expansion of its domestic and non-domestic energy efficiency schemes.

The Warmer Homes Scheme (WHS), which is targeted at low income households, has assisted 39,831 homes, with spending of €37.1m from 2006 to date. The Home Energy Savings Scheme (HES) provides grants towards the cost of energy efficiency investments (such as insulation) in homes. It has assisted a further 51,605 homes, with a total budget €45.3mil from 2008 to date. These programmes are in addition to the Greener Homes Scheme, which has provided €70.4m in grants towards 27,516 residential renewable energy installations from 2006 onwards.

In tandem with the increased level of activity in existing programmes this year, the Department and SEAI are also designing a new retrofit programme, which will be launched shortly. This programme is currently the subject of a public consultation but in broad terms it will bring together the existing HES and WHS, as well as support programmes for businesses and the public sector.

The retrofit programme will make discounts on retrofit work available up front rather than having to wait for retrospective grant payments, and will make energy efficiency measures more accessible to both homes and businesses. The programme will significantly contribute to meeting the national efficiency targets, including the target of 33% set for the public sector. It will also create significant employment in the energy and construction sectors in support of economic renewal. Pending the finalisation and introduction of the retrofit programme, the HES and WHS will continue in their current form in 2010.