Concern by St Vincent de Paul levy increase in electricity bills will 'wipe out' savings

The Society of St Vincent de Paul (SVP) has told the energy regulator that the proposed 36% increase in the Public Service Obligation Levy (PSO) on electricity bills is a fourfold increase on the 2011 level.

The increase will wipe out almost 50% of recent savings for electricity customers.

 In its response to the Regulator’s latest consultation document SVP says that the proposed PSO increase will add about €90 (including VAT) a year to domestic bills.

This is an increase of about €23 (including VAT) on the current levy. Recent price reductions in electricity charges have saved customers approximately €50 a year.

 John-Mark McCafferty, Head of SVP Social Justice and Policy said: “The PSO is a longstanding instrument of Government energy policy and the Regulator’s role is only to calculate the levy in accordance with Government policy.

 But it remains a largely forgotten tax which will raise €0.44bn in 2016/2017 to subsidise the energy industry,

  It is imposed on all domestic customers at a flat rate, creating an increased burden on low income customers and those with a history of arrears and indeed multiple debts.

Given the levy increase envisaged, the PSO can be viewed as a regressive tax.

 With VAT added domestic customers are effectively paying a tax on a tax.

 In the interest of social justice and fairness, we urge a review of the PSO application for low income and struggling energy customers.”

 Submissions to the CER Consultation Paper closed yesterday  (Monday 27 June) with a final decision to be announced on August 1 for implementation from October 1.

 The full SVP submission can be found at http://bit.ly/291OFgB