Reduction in PSO levy an improvement but its existence still needs to be reviewed

01/09/2016

The Society of St Vincent de Paul (SVP) has welcomed the reduction of 2.1% in the proposed Public Service Obligation Levy (PSO) level from 1st October next but still insists that the existence of the levy itself should be reviewed for the sake of fairness to consumers.

A revised document from the Energy Regulator (CER) published today (1 September 2016) says that the PSO due to come into effect on 1st October for 2016/17 has been reduced by 12c per month (€1.44 for the year) for consumers.

This revision represents a reduction of €8.505 million to the PSO levy amount of €400.9 million published on 29th July 2016.

Following today’s announcement the PSO levy amount for 2016/17 is €392.4 million

The change is a result of ESB formally notifying the CER on 25th August 2016 that an internal ESB financial reporting error resulted in an over-statement of ESB’s submitted 2016/17 PSO cost amounting to €8.505 million.

SVP welcomes the CER decision to request a comprehensive report on how the error occurred.

“Despite the downward adjustment it still means that the levy on electricity bills will have increased more than fourfold  since October 201, when it stood at €92.12m.” said John-Mark McCafferty, Head of SVP Social Justice and Policy.

The  PSO will now add €80.36 (including VAT at 13.5%), down from the proposed €82.04, to domestic bills for the 12 months from October 2016. The current levy for 2015/2016  is €68.20 (including VAT) for domestic bills.

John-Mark McCafferty said that SVP is repeating its call to have the social impact of the PSO assessed.

“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

“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.” he said.

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