What is the PSO Levy?
The Public Service Obligation Levy, or PSO Levy, is charged to all electricity customers in Ireland.
It covers various subsidy schemes designed by the Irish Government to support its national policy
objectives related to renewable energy, indigenous fuels (peat) and security of energy supply for
Ireland.
The proceeds of the levy are used to contribute to the additional relevant costs incurred by PSOsupported electricity generation which are not recovered in the electricity market, typically via
contracts that suppliers have in place with electricity generators.
The CER’s role is to calculate the PSO levy in accordance with Government policy and to help ensure
that the scheme is administered appropriately and efficiently.
The PSO Levy is collected from all electricity customers in Ireland through their energy bills.
What is the Levy for period 2016/17?
The PSO Levy for the period 1st October 2016 to 30th September 2017 is €400.9 million.
This figure is approximately €40m less than the original figure set out in the proposed PSO Levy on
31 May 2016, which was €440.9 million. This is due to a number of factors, including an increase in
wholesale electricity prices, changes to the estimated REFIT costs and a PSO rebate from the ESB
West Offaly Plant. The new PSO levy is higher than the previous year’s levy of €325.3 million.
There are a number of factors which are putting both upward and downward pressure on the PSO
levy for 2016/17 as follows:
Upward Levy Pressure

Increase in Renewables: An estimated 2,814 MW of renewable generation, mostly wind, will
be supported by the PSO next year. This represents the largest increase in the proposed PSO
Levy and is to assist Ireland in achieving its renewable energy targets in line with government
and EU policy. This is 694 MW, or 33%, more than the 2,120 MW supported in the current PSO
period, hence driving up the levy.

Lower Wholesale Prices: The estimated wholesale market price is 17% lower than the price
used to calculate the current PSO period. A lower wholesale price means that the payment to
companies supported by the PSO increases.

Under Recovery: There is an additional €24.3 million relating to the 2014/15 period. This is the
result of an under recovery of monies by renewable generators compared to what was
expected when the PSO levy was set for the 2014/15 PSO period. There is an additional amount
of €16.8 million relating to ESB peat plants in the 2014/15 period. This is the result of an under
recovery of monies compared to what was expected when the PSO levy was set.
Downward Levy Pressure
•
Termination of contracts: The termination of PSO contracts for the Tynagh, Aughinish and
Edenderry generation plants will result in these plants receiving no support from the PSO for
the 2016/17 PSO period. This is reducing the levy by the order of €55 million compared to the
current period.
•
Contracts for Difference (CfDs): Wholesale market contracts related to the PSO are reducing
the levy by €14.0 million. This reflects a wholesale market price for 2014/15 which on average
was lower than the contract price for the period overall.
PSO Levy 2016/17:
Total
PSO
2015/16
€ million
Forecast
2016/17
€ million
R Factor
2014/15
€ million
Renewables
180.9
277.6
24.3
301.9
Peat
121.9
115.4
16.8
132.2
Security of Supply
47.4
0.0
-17.5
-17.5
PSO CfDs
-9.3
0.0
-14.0
-14.0
Other
-15.5
1.2
-3.0
-1.7
Total
325.3
394.3
6.6
400.9
Category
PSO Levy
DECISION
2016/17
€ million
What will an increase like this mean for customer bills?
Based on a PSO levy of €400.9 million, the CER has calculated the payment that each customer will
be charged on their energy bills.
The 2016/17 Levy equates to an increase of €1.01 per month for domestic customers and €3.30 per
month for small commercial customers.
The full breakdown of costs per customer, depending on what category they occupy for the levy
period 1st of October 2016 to the 30th September 2017, are as follows:
PSO Customer
Category
Current Annual
Levy Amount
2015/16
Proposed Annual
Levy Amount
2016/17
Proposed Levy
Amount 2016/17
Per Month
Domestic customers
€60.09/customer
(€5.01 per month)
€72.28/customer
€6.02/customer
Small
commercial
customers
(maximum
import capacity of less
than 30kVA)
€214.5/customer
(€17.88 per month)
€254.16/customer
€21.18/customer
Medium
and
large
customers
(maximum
import capacity of equal
to or greater than 30kVA)
€33.14/kVA
€40.87/kVA
€3.41/kVA
This increase for domestic consumers compares to an average decrease in electricity bills of €57.53
for customers on standard tariffs and by €102.01 on average for those on discounted plans between
January 2015 and July 2016.
Large energy users on wholesale pass through tariffs have already seen decreases in wholesale
electricity prices of 30% from January 2015 to March 2016.