Fine Gael warns of 10% hike in electricity prices

GREEN PARTY policies will result in a 10% hike in electricity prices this autumn and push many families and businesses into crisis, according to Fine Gael.

Commenting on the decision to introduce a 5% Public Service Obligation (PSO) levy on electricity prices in October, Fine Gael energy spokesman Leo Varadkar said the move would just be one part of a “double whammy” of energy price hikes.

He said that Energy Minister Eamon Ryan is also planning a separate review of electricity prices in September which is expected to result in a further price increase.

“Both hikes hitting around the same time are likely to see household bills go up by 10% in a month,” he said. “What we’re seeing here is the impact on consumers and businesses of radical Green Party politics. Oil and gas prices have gone down, which should mean cheaper electricity, but it’s actually costing more because of their policy.”

Mr Ryan unveiled plans for the new PSO levy last week. Coming into effect from October, the charge is expected to raise up to €157 million and will be used to offset the costs faced by electricity producers who are obliged to buy a certain proportion of renewable and peat-generated electricity.

Commission for Energy Regulation chairman Michael Tutty suggested the levy was merely reflecting the actual costs in the market and Ireland’s reliance on imported fossil fuels.

“The renewables will help us a lot in the future by helping to keep prices down and giving us security of supply. The peat generating stations are there because they are an indigenous fuel. It is also more secure than importing gas from abroad and also gives jobs in the midlands, Bord na Móna and the stations.”

This position was backed by Minister for Agriculture Brendan Smith, who said the levy was “absolutely necessary” and would assist the Government meeting EU targets for renewable energy.

The move has provoked strong criticism from representative groups and business with claims that Ireland had among the highest energy prices in the EU. However, comparative Eurostat data on household electricity unit prices indicates that in late 2009 Ireland was among the cheaper EU countries for electricity.

Groups representing the economically disadvantaged, however, pointed out that even small increases will adversely impact on many people.

Fianna Fáil TD Chris Andrews also stated that the ESB should absorb some of the cost.

“The proposed price hike is particularly testing for people, given the large salaries of some senior staff in the ESB, and I believe that no increases should be forced on to taxpayers before the review of pay rates of semi-state CEOs is complete,” Mr Andrews said.

Meanwhile, the Bord Gáis Energy Index, which monitors the underlying cost of energy production, fell by 1% in July, largely due to the strengthening euro.


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