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PSO Levy increase effective from today

The public service obligation (PSO) levy increases today, a factor that will impact all electricity customers across Ireland, as electricity bills will increase

The public service obligation (PSO) levy increases today, a factor that will impact all electricity customers across Ireland, as electricity bills will increase.

All domestic electricity customers will be affected, regardless of their electricity consumption, with the new PSO Levy period set to run from 1 October 2014 to 30 September 2015.

This increase in the cost of electricity bills, will come as unwelcome news for consumers. A recent study conducted by, highlighted the impact that the rising cost of energy is having on Irish households.

Results from our nationwide survey found that electricity was the biggest cause for concern when it came to utility bills - with nearly half of households (45%) feeling pressure as a result of electricity bills.

More recently, a separate study by revealed that over half (61%) of households have gone cold in their own homes this winter in an attempt to keep a lid on their energy bills.

What the increase means for electricity customers

The PSO Levy is increasing by more than 50%, rising from a current annual charge of €42.84 per customer to €64.37 (excluding VAT). That represents an increase of €21.53 per customer, although the total increases from €48.62 to €73.06 when VAT is added.

The increase means the PSO Levy has seen a rise by 233% since it was first introduced in 2011, when the total annual amount payable was less than €20 per household.

The new increased cost breaks down to a monthly levy of €5.36 (€6.08 including VAT), up from €3.57 from the 2013/14 period, meaning the average household electricity bill will increase by €24.44 (inc VAT) for the year.

PSO Levy increase 2011 - 2015 (excluding VAT)Table of PSO Levy changes 2014

From today the average household electricity bill is set to increase from €1,211 to €1,236.

This calculation is based on Electric Ireland’s __Standard Domestic Electricity urban 24 hour tariff using the national average consumption. According to the Energy Regulator (CER), the average Irish household uses 5,300 kW/h of electricity per year. Prices include PSO Levy & 13.5% VAT.

PSO Levy - the wider impact

The levy imposed on domestic electricity customers helps to subsidise government schemes that relate to nationwide renewable energy targets, fuels and the security of supply.

The Commission for Energy Regulation (CER) is responsible for setting the PSO Levy and must ensure that cost calculations are done correctly. However, any terms of PSO schemes are beyond its control as the CER merely calculates the levy before administering it accordingly. Suppliers have no discretion over the levy and it is for this reason that the costs are passed on to the customer.

It is expected to generate €335 million for the 2014/2015 financial year, up from nearly €211m in 2013/2014. The rise comes despite a fall in the wholesale cost of generating electricity.

Is it time to switch?

The increase of the levy is an ideal opportunity for those with electricity and dual fuel tariffs to compare prices across the market in search of the best deals. Customers should examine their bills carefully to ensure they are not overpaying for their energy.

Switching suppliers is the quickest way to cut down on your energy bills. Households can save up to €293 per year just by switching to the cheapest energy deal in the market. Comparing prices and switching to the the best supplier that meets your needs is easy with

Compare gas and electricity tariffs and save with