Increase in PSO levy hides the massive fourfold increase on customers

29/07/2016

Increase of 20% in PSO levy announced today hides the massive fourfold increase on customers since 2011, says St Vincent de Paul 

The Society of St Vincent de Paul (SVP) has criticised the 20% increase in the Public Service Obligation Levy (PSO) on electricity bills announced today by the Energy Regulator (CER).

The €400.9m levy for 2016/17 will mean that the levy on electricity bills will have increased more than fourfold since October 2011, when it stood at €92.12m.

The PSO will now add  €82.04 (including VAT at 13.5%)  to domestic bills for the 12 months from October 2016.. The current levy is €68.20 (including VAT) for domestic bills.

John-Mark McCafferty, Head of SVP Social Justice and Policy says that the operation of the PSO levy must now be reviewed for the sake of fairness.

“The PSO is a longstanding instrument of Government energy policy and the Regulator’s role is only to calculate the levy in accordance with Government policy.

“It is imposed on all domestic customers at a flat rate, creating an increased burden on low income customers and those with a history of arrears and indeed multiple debts.

"With VAT added domestic customers are effectively paying a tax on a tax.

“In the interest of social justice and fairness, we urge the Government to review of the PSO application for low income and struggling energy customers.” he said

The PSO levy was designed by the Irish Government to support its national policy objectives related to renewable energy, indigenous fuels (peat) and security of energy supply.

Some of the required funding (subsidies) ended in 2015 but new (renewable) schemes continue to be added subject to Government and EU approval.

“At this stage the security of supply and indigenous fuels recede in importance and some 75% of the proposed levy is funding renewables.

“While we are in favour of supporting renewable and sustainable energy, in the light of such an increase the social impact of the PSO levy must now be assessed.” said Mr McCafferty.
 

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