Families will pay €3.23 extra a month for electricity from October when regulators plan to boost a levy to fund green energy development.
Homes and businesses pay a public service obligation (PSO) on their electricity bills to support two State schemes meant to aid renewable energy.
The Commission for the Regulation of Utilities (CRU) has said it will set the household charge to €3.23 a month from October and the levy paid by businesses to €12.91. For the past year, the charge to both groups was zero.
[ Building consultancy plans hiring drive amid energy retrofit boomOpens in new window ]
Large energy users, including data centres and manufacturers, face increases tied to the actual amount of electricity they use.
‘I’m going to get a spicy margarita and I’ll be back’: should executives remain involved in work during their holidays?
Drop of The Black Stuff hits the spot for men with sensitive skin
New technology that can inform you about a rental property’s history, good and bad
Why Donald Trump’s pitch to become a ‘crypto president’ is quite bizarre
Regulators are increasing the charge to claw back almost €276 million credited to consumers and businesses over the 12 months from October 2022.
The commission expected sharp increases in wholesale electricity costs over that time. This would have resulted in some wind farms getting paid more than the price agreed through the State’s Renewable Energy Support Scheme (RESS).
Consequently, the regulator credited about €89 to every household over that period.
However, as wholesale prices did not rise as much as expected, and wind farms received less for their electricity than the regulator anticipated, the commission must now take back some of the cash returned to businesses and households.
[ Bord Gáis Energy profits reach €50 million in the first six months of 2024Opens in new window ]
The CRU explained on Thursday that the increase for the 12 months from next October would have been higher but for its decision last year not to return €67.5 million in credits to electricity customers. Instead, it set the public service levy at zero for the 12 months up to October 2024.
Under the RESS, wind and solar farms receive €74-€100 a mega watt hour respectively for the electricity they generate. If wholesale market prices top that, the regulator returns the difference to consumers by giving them a credit on their electricity bills.
If wholesale prices fall below the figures agreed under the RESS, customers make up the difference through the public service levy.
[ CSO study highlights steep increases in food and energy prices since 2016Opens in new window ]
The system is meant to give electricity companies certainty so they can raise the cash needed to build more renewable power plants.
John Melvin, CRU’s director of wholesale markets, said that while homes and businesses benefited from credits and a zero charge over the past two years, renewable generators this year “require much greater support under the government schemes”.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
