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Many unable to pay increasing electricity and bin charges

By Ann Marie Foley - 12 July, 2017

The Society of St Vincent de Paul has stated that many people cannot afford expected changes to electricity and bin charges in September and October.

“Autumn is a particularly difficult time for families who have just faced back-to-school costs and are worrying about upcoming Christmas expenses and getting through the winter months when energy bills are at their highest,” said SVP.

Many have complained about planned changes in waste charges in recent days. SVP stated that while it accepts that the pricing structure should encourage waste reduction and recycling, waste charges should be regulated and “poverty proofed”. Affordability measures should also be introduced for low income households to help prevent further hardship.

SVP has highlighted that households with young children or family members with medical needs should be offered reduced charges, as they will find it more difficult to reduce waste. So too will those without cars who have less access to recycling facilities.

Another expense is the proposed increase in the Public Service Obligation Levy (PSO)* which, if implemented, will bring the annual charge increase to consumers to around €100. This is the single largest fixed charge in an electricity bill.

The proposal by the Commission for Energy Regulation (CER), which sets the rate, is to increase the PSO levy by 27 per cent from €392.4m in 2016/2017 to €496.5m for 2017/2018.

Given the yearly increases over the last five years, SVP fears a much more significant charge into the future. In 2011/2012 the levy was €92, increasing to €131 in 2012/2013. By 2015/2016 it had more than doubled to €325.

Jennifer Thompson, SVP Social Policy Development Officer, also highlighted that a higher proportion of the levy is paid by domestic and small commercial customers.

“As it stands, the PSO is imposed on all domestic customers at a flat rate, irrespective of household energy usage. It creates a disproportionate burden on low income customers. With VAT added, domestic customers are effectively paying a tax on a tax,” she said.

“In the interest of social justice and fairness, we urge the government to review the application of the PSO levy to struggling energy customers and spread the cost burden more evenly between electricity customers and renewable energy producers.”

Minister Naughten is expected to publish details of a price support scheme for companies producing renewable energy, including both off-shore wind and solar energy. So SVP is concerned that the levy will increase even more and therefore wants an assessment of the social impact of the PSO levy.

*The PSO levy was designed to support national policy objectives related to renewable energy, indigenous fuels (peat) and security of energy supply.

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