All domestic billpay electricity customers will receive a monthly credit of €12.73 beginning in March.
There'll be some small relief for hard-pressed electricity customers as the energy regulator, the Commission for Regulation of Utilities (CRU), has finally announced how it plans to refund customers money due under the Public Service Obligation (PSO) levy scheme.
But first, a reminder...
What is the PSO Levy?
The PSO levy is used to support the renewable energy sector in Ireland.
It was introduced by the Fianna Fáil and Progressive Democrats coalition in 2010 and all subsequent governments have maintained the policy and the charge since.
The scheme has been a success in that it's helped Ireland generate around 40% of its electricity from renewable sources in a relatively short space of time.
The CRU sets the level of the PSO levy every year, which runs from 1st October until 30th September.
The levy has been as high as over €100 a year in the past but last year the CRU cut it to €0.
On top of this, it announced that a credit or rebate of €89.10 would also be paid to households under the PSO scheme. However, details on how the money would be repaid weren't announced at the time as new legislation and a detailed mechanism for the refund was required before issuing the money to customers it was said.
Why the refund?
The amount that customers are charged for the PSO levy depends on a range of factors, the biggest of which is the wholesale price of electricity.
Because the main objective of the PSO levy is to promote and support the renewable energy sector in Ireland it has been determined that certain types of power generation e.g. wind and solar, should be protected from sharp market price fluctuations. In other words, they should be guaranteed a minimum price for the electricity they generate.
However, as we all know, over the past two years the price of gas and electricity has shot up. This has meant the price wind farms have been getting for the electricity they generate and sell into the grid has gone up meaning they need no financial support at present under the scheme. On top of this, some of the excess money that was earned due to record electricity prices is being refunded.
How will the refund work?
According to the CRU all domestic billpay customers will receive a credit of €12.73 every month beginning in March until September 2023. So just over €89.10 in total.
The credit will be paid automatically so you don't need to apply for it or contact your supplier. You'll see a monthly PSO payment for €12.73 clearly outlined as an individual billing line item on every bill.
If you're a prepay customer, you'll receive the refund through an adjustment to your daily standing charge.
And of course, on top of this, the next €200 Government electricity credit will start hitting accounts from March.
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