Tuesday, 13 October 2020
Department of Communications, Climate Action and Environment
Public Service Obligation Levy
45. To ask the Minister for Communications, Climate Action and Environment if his attention has been drawn to the impact the large increase in the PSO will have on electricity customers during the Covid-19 pandemic in view of the fact hundreds of thousands of persons are already struggling financially. [29963/20]
The PSO levy has been in place since 2001, and is a charge on all electricity customers without exception. It consists of a set of support schemes designed to facilitate national electricity policy objectives for renewables and security of supply. From a policy standpoint, the PSO has been and will continue to be a vital policy support for the development of renewable electricity and to enable Ireland to reach EU renewable energy targets and our own national energy and climate targets as stated in Ireland's National Energy and Climate Plan, Climate Action Plan and the Programme for Government.
Under the PSO legislation, the calculation of the Levy is strictly a matter for the Commission for Regulation of Utilities, the independent electricity and gas regulator. The legal basis for the PSO levy and its method of calculation are set out in regulations made under the Electricity Regulation Act 1999 and in the Public Service Obligations Order 2002 (S.I. 217 of 2002) under which the CRU is assigned responsibility for calculation of the levy each year.
The CRU’s decision on the PSO for 2020/21 will result in an increase in the PSO for households of €3.68 per month. As regards impacts on electricity customers, I am acutely aware of the financial challenges faced by households during these exceptional times. Government provides extensive supports for household energy costs via welfare schemes and energy efficiency grants, with specific schemes aimed at those at risk of energy poverty. Welfare supports include the Household Benefits Package and the fuel allowance and both are matters for the Minister for Employment Affairs and Social Protection.
Energy efficiency upgrades are provided free of charge to households at risk of energy poverty mainly through the Warmer Homes scheme, operated by the Sustainable Authority of Ireland (SEAI) on behalf of my Department. In 2020 the budget allocated is €52.8 million, the largest ever budget allocation for the scheme. Additional detail on other new and expanded schemes as well as an increased allocation for the Warmer Homes Scheme will be announced after the Budget.
The PSO is only one part of the monthly electricity bill. Electricity customers can save on the variable part of the bill by switching electricity supplier or engaging with their suppliers. Price comparison websites, approved by the CRU, can assist consumers to switch. As of 6 October 2020, depending on the tariff they are on, consumers could save up to €307 annually by switching suppliers, and thereby help mitigate the PSO increase.