The Commission for Energy Regulation has proposed that the public service obligation (PSO) levy is raised by 40% for consumers. The levy is mandated by the government and is mainly used to cover the cost of subsidy schemes to support the generation of electricity from renewable sources, such as wind farms.
The proposals to increase the PSO levy by 40% for domestic users, by 39% to small commercial users and by 12% to medium and large industrial users is totally excessive.
Before it is implemented we need to have a proper debate on what alternative energy industries we should be supporting in this country. The implications of these large increases for all sections of our society are huge.
Spiralling costs for domestic and commercial users
For domestic customers, many of whom are struggling to make ends meet, it will represent a rise from €11.90 per two-month energy bill to €16.54, which is a 40% increase.
This is not justifiable when the annual rate of inflation is between 1% and 2%, and is sure to inflict further hardship on low income households and people who cannot afford to pay their energy bills at the moment.
For small commercial users the proposed increase is from a current monthly charge of €20.73 to €28.79, and represents a 39% increase. The implications of this increase for small businesses are very serious. Many of these companies are struggling with costs to keep going as it is, and in many cases employ one or two people. These jobs will be in jeopardy now.
How are we supposed to entice people to take a chance and open small businesses and create employment if energy costs are to spiral in this fashion? Are we going to be happy to see our unemployment rate rise so we can support uneconomic energy sources like the wind industry?
Costs will affect hiring decisions
Medium and large industries will be hit with 12% increase which is a further blow to costs and would certainly be a major factor in any decision to hire more employees or expand in the future.
This latest round of increases will mean that we are less competitive across the board and less able to compete when it comes to Foreign Direct Investment.
The proposed increases across the board are excessive and are totally unjustifiable. They will have implications for every person in our society.
We need an immediate debate
An immediate debate is needed in this country about our support for industries like wind that cannot stand on their own two feet financially and which is receiving huge subsidies from this PSO levy. Once again it is the ordinary people who are paying while there are certain individuals making a fortune out of this sector.
I am calling on the Commission for Energy Regulation to stall this proposed increase and let us have an informed and honest debate about our future energy policy.
I am all for renewable energy sources and alternative energy industries if they are financially viable, but what is going on at the moment is unsustainable. It is unfair to ask the general public and businesses to shoulder the cost of providing what are uneconomic alternative energy sources.
Michael Fitzmaurice is an Independent TC for Roscommon–South Leitrim.