Households will see almost €90 cut off their electricity bills over the next seven months as a result of the decision to reduce a Government levy.
The electricity regulator announced on Thursday that domestic customers will have their bills for the seven months between March and September credited by a cumulative €89.10 following its determination that the annual Public Service Obligation (PSO) levy for 2022/23 should be zero.
The decision was taken as a measure by the Government to address inflation and ease the financial burden of rising consumer costs on families. The levy is designed to support the development of renewable energy supplies in Ireland.
The Commission for Regulation of Utilities (CRU) said no support for renewable energy suppliers was required from the levy for 2022/23 as wholesale electricity prices were high due to higher gas prices.
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[ High electricity bills set to last rest of this decadeOpens in new window ]
“Under the terms of the scheme, the benefits of buying from renewable generation are now to be paid back to customers through a PSO payment on their bills,” the regulator said.
Electricity suppliers will credit their domestic customers with a PSO payment of €12.73 per month for the next seven months. The CRU said customers are not required to take any action and the payment will be reflected on the first bill received based on usage of electricity from March 1st.
Prepay customers will have the credit applied via a reduced standing charge on a daily basis from the same date.
The CRU said small commercial customers will also receive a monthly payment of €44.50 for seven months, while medium and large commercial customers will be paid based on their electricity usage levels.
The regulator said a decision on the size of the PSO levy for 2023/24 would be calculated and decided in July.
CRU director of security of supply and wholesale, John Melvin, said the measure taken to reduce the PSO levy to zero was due to the unprecedented global wholesale gas prices over the last two years.
“Given that this was the first time we have experienced a negative PSO levy amount, the PSO payments will come as an additional relief to all electricity consumers over the coming months,” said Mr Melvin.
The credit due to the scrapping of the PSO levy for 2022/23 is separate to the €50 compensation that all households are due to receive after being overcharged for more than a decade by ESB Networks.
That refund comes following the scrapping of a subsidy which was introduced over a decade ago to help large businesses by raising €50 million annually.
It emerged that ESB Networks mistakenly used a percentage rather than a fixed amount when calculating the charge for domestic users.
