Electricity bills to ‘jump by an unjustifiable €54’ tomorrow to ‘subsidise’ green energy

Independent TD Denis Naughten has said that the “jump by €54 a year” in electricity bills from tomorrow (Thursday, October 1) is “completely unjustifiable”.

The deputy expressed his concerns that “despite the jump in cost” that will “subsidise renewable electricity”, there will be 44,000 less homes supplied with green energy.

The Roscommon-Galway TD continued:

“Under a decision taken during the summer by the Commission for the Regulation of Utilities (CRU), electricity bills will go up by €54 from October 1 under the Public Service Obligation (PSO) to subsidise the cost of generating renewable electricity, mainly from wind.

“However, hidden in the detail is the fact that in the next 12 months, the CRU expects that 83MW less renewable electricity will be generated, which would be enough to power 44,000 homes with green electricity.

Also hidden in the decision by the regulator is the reduction in the PSO for peat-fired electricity which should have seen electricity bills fall by €4 per year instead of jump by €54 per year.

“So, even though electricity customers are no longer paying for the burning of peat in power stations, the levy is set to increase by 140% yet, this will subsidise the generation of electricity for 44,000 less homes over the next 12 months.”

Deputy Naughten said this “perverse twist to hike in electricity bills” needs to be “outlined in detail by the regulator”.

He has written to deputy Brian Leddin, chair of the Dáil Committee on Climate Action. The letter states:

“The CRU should:
  • Clearly explain why the PSO levy is set to jump by €54 in real terms in 2020/2021 yet it will subsidise less electricity than it did in 2020;
  • Outline why electricity customers should continue to pay €7.66 million in levies over the next 12 months for peat-generated electricity when the PSO ceased for West Offaly and Lough Ree power stations at the end of 2019;
  • Clarify if the PSO will be used to fund the decommissioning costs of West Offaly and Lough Ree power stations and if this is being considered that CRU will allow for alternative proposals to be presented which could facilitate the retention of the buildings for other uses, including renewable energy uses.”

Eoin Clarke, chief executive of Switcher.ie said at a time where every penny counts, this increase in the PSO is “going to be a big kick in the teeth for consumers already struggling”.

“While helping the planet and supporting renewable energy, an over 100% rise feels incredibly unreasonable for something many people feel isn’t directly impacting them and they have no control over,” Clarke said.

With electricity price rises also coming into force over the next few days, people are likely to see their bills sky-rocket; especially as people are likely to spend more time at home than ever this winter.

“It’s important you don’t pay more than you need to, if you’re on a higher tariff than you have to be it’s simply extra money in the energy supplier’s pocket, not yours.”