Éamon Ó Cuív (Galway West, Fianna Fail)
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254. To ask the Minister for Communications, Energy and Natural Resources if he is aware of the dramatic increase in the public service obligation levy on electricity customers in recent years and the impact the recently proposed increase of €7,500 per month by the Commission for Energy Regulation will have on industry in 2016 and in 2017 and on businesses that have a 2,000 kVA requirement; the amount of the levy that relates to the burning of turf and that relates to wind energy; if he will review the policy in relation to the levy to reduce its effect on electricity costs which are among the highest in the European Union; and if he will make a statement on the matter. [16589/16]

Denis Naughten (Roscommon-Galway, Independent)
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The Public Service Obligation (PSO) has been in place since 2001. The PSO levy supports a number of schemes designed to facilitate the Government's electricity policy objectives for renewables, indigenous fuels and security of supply. It also supports employment in the renewables industry and in the peat industry.

The calculation of the level of the PSO is a matter for the Commission for Energy Regulation (CER), which has published a consultation on a proposed levy of €441 million for 2016-2017. This is an increase of 36% on the levy amount for 2015/2016. The proposed levy amount for  2016-2017 equates to €79.48 per annum for domestic consumers, €279.48 per annum for small business customers and €44.94/kVA per annum for medium to large businesses.  The biggest drivers for the proposed levy increase are the lower predicted wholesale market electricity price and increased deployment of renewables.

Of the proposed levy total, €137.7 million will be used to support electricity generated by peat-burning plants with a capacity of 250 MW. The indicative support for renewable electricity generation in 2016/2017 is €334.1 million. This will support over 2,500 MW of renewable energy, including onshore wind, offshore wind, biomass, anaerobic generation, biomass landfill gas and biomass combined heat and power. The vast majority of supported renewable generation is wind power. It should be noted that the recently published PSO Levy paper is a proposed decision and is open for consultation until 27 June 2016. In accordance with its statutory obligations, the CER will publish the final PSO Levy Decision before 1 August 2016.

Recent international studies have shown that Ireland has had one of the lowest per unit supports for renewable energy in the European Union

Responsibility for electricity and gas market regulation is a matter for the CER, which is an independent statutory body. CER also carries out statutory market monitoring functions, has the responsibility to ensure that the market operates competitively for the benefit of the consumer, and accredits price comparison sites where energy consumers can assess prices and identify significant savings.

The competitive energy market results in choice for consumers and businesses in terms of suppliers, products and prices, exerting downward pressure on prices. As the wholesale electricity price is falling, this should be passed onto electricity customers and this will mitigate the proposed levy increase in the current period. In this regard I am pleased to see that some electricity suppliers have recently reduced their price offerings in the domestic sector. Domestic customers can also avail of discounts available, either by contacting their supplier directly or by using accredited websites to switch to discounted tariffs.