Alex White (Dublin South, Labour)
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Tynagh Energy and Aughinish Alumina were awarded 10 year contracts subsequent to a competition run by the Commission for Energy Regulation (CER) in 2005 to provide urgently required capacity to the electricity system. The purpose of the scheme was to ensure security of supply in the framework of continuous electricity demand growth at that time. These plants will transition out of subsidy consequent to the expiration of their contracts during 2016. A correction amount, known as the R-factor, will continue to be payable for the following years, based on the difference between a supplier’s ex-ante estimate of entitlements under the relevant PSO scheme and the actual entitlements determined two PSO periods later through the submission of audited, verifiable figures to the CER. The PSO levy has been in place since 2001 and is the overall support mechanism for generation constructed for security of supply purposes, including peat generation, and for the development of renewable electricity. It is designed to compensate electricity suppliers for the additional costs they incur by purchasing electricity generated by these producers. The PSO levy is vital to enable Ireland to 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 CER 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 (S.I. No. 217 of 2002). The annual PSO levy amount for 2014/2015 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/kVA for medium and large customers.

The CER published, for consultation, its proposed decision paper on the 2015/16 annual PSO levy on 12 June which CER computed, in accordance with the legislation, to be €304.8m million. This equates to €56.52 per annum for residential customers, €200.98 per annum for small to medium sized business customers and €30.96/kVA for medium and large customers. A final decision will issue by the CER by 1 August 2015.