The CER has reduced the PSO Levy increase for 2016/17
From 1 October, the levy will cost customers €70.75 (€80.30 incl. VAT) per year
Earlier this summer, the CER announced that it planned to increase the PSO Levy for 2016/17 by €13.84 per consumer (incl. VAT). This would have brought the total levy amount to €82.04 including VAT for the year.
Change in decision
Today, however, the CER has released a revised decision paper on this, which confirms that this year’s levy will in fact only be increasing by €12.10 (incl. VAT). This means the total levy will result in an annual cost of €80.30, including VAT, for all electricity customers.
Currently, the levy stands at €68.20 per year, and the increase will come into effect from 1 October.
What has changed?
The CER has said that the amendment has come about due to a correction for a declared overstatement – amounting to €8.5 million - of what is known as the ‘R-factor’ for 2014/15. The R-factor is explained by the CER as follows:
The PSO levy is determined each year based on estimates of costs to be recovered by all relevant parties, relative to the PSO benchmark price. In line with the Notification, this amount is usually reconciled retrospectively (‘R-factor’) two PSO periods later, once actual, audited costs are verified and the true market price and generation levels are known.
What does this mean for me?
Unfortunately, although the amount of the increase has reduced, the PSO Levy will still cost you more for 2016/17 than it did last year. And, there’s nothing you can do to avoid paying the increased levy, as it’s a standard part of all domestic electricity bills.
But it would be worth taking a look at your energy bills and the deals that are out there, as switching to a cheaper energy supplier would more than cover the cost of the levy increase.
Only 14% of us switched our electricity last year, so there’s loads of scope for the rest of us to make savings. At the moment, the average dual fuel customer can save up to €358 per year by switching from standard tariffs to the cheapest deals on the market.
Compare energy deals: See how much you could save