Sinn Féin spokesperson on Climate Action and the Environment, Darren O’Rourke TD, has called on the government to adopt his party’s proposals to reform the Public Service Obligation (PSO) levy, as households are about to be hit by an extra €40 on their bills.

Commenting on the news that wind energy generators have blamed the regulator for a hike in the levy on domestic electricity bills, claiming it got its figures wrong, the Meath East TD said:

“Ordinary workers and families are to be hit with an extra annual charge of almost €40 on their electricity bills. This increase is adding to the financial strain on ordinary people, especially considering the fact that electricity prices are still way above the pre-energy crisis average, and considerably higher than the European average.

“With the number of households in arrears already at staggering levels, the reality is the increase will inevitably lead to more families struggling to pay their bills and at risk of disconnection.

“In Sinn Féin, we believe households deserve much better. The government’s decision to allow this additional charge demonstrates their commitment to a system that is deeply unfair.

“The PSO levy is in place to bolster the roll-out of renewables by subsidising the generation of electricity from sustainable sources, such as wind and solar power.

“However the PSO levy, as it stands, is deeply regressive. While the PSO levy is charged on all final electricity customers, the burden of meeting costs is not evenly or equitably distributed across or within different user groups.

“What this means in practice is that households are hit hardest by these costs. This is because the levy is based on peak demand rather than total demand. For example, over the last year, domestic users accounted for 39.7% of peak demand, yet only accounted for about 28% of total demand.

“Like many of the government’s efforts to transition to net zero, they have made absolutely zero effort to ensure that it is just.

“The reality is that the renewable electricity generation target is based on the proportion of total electricity demand; not peak demand. This means that increases in total demand out to 2030 is what necessitates increased levels of PSO subsidy, and that increase is driven largely by data centres and other large energy users. Yet the burden of funding the levy is borne disproportionately by households.

“With households accounting for a disproportionate share of PSO levy costs, it is lower income households that shoulder a particularly unfair portion of the burden. The PSO is currently charged at a flat rate for every household regardless of income or electricity usage, making it both socially regressive and environmentally indiscriminate.

“In Sinn Féin, we believe this inequity must change. We would reform the structure and distribution of the PSO levy to ensure a more equitable and progressive model. For example, per-unit charges would provide the dual advantage of reducing the undue cost burden on the lowest income households and shifting it to high energy users.

“As we transition to net zero, it is crucial that ordinary workers and families are shielded from undue cost-burdens. The government must stop treating them as the collateral damage in the move toward a fossil free future.”