PSO Levy explained

What the Public Service Obligation (PSO) is and how it affects you.

There are many components which contribute to the cost of your electricity bill; amongst them a tariff imposed by government on all electricity users called the Public Service Obligation (PSO).

The PSO Levy makes up part of each domestic and small commercial customer electricity bill. It is collected at the same time as payment for the power which has been used, although displayed separately on the bill. The tariff is used to cover the additional costs associated with producing sustainable and renewable energy in Ireland.

Sustainable and renewable energy sources such as certain thermal power stations, and wind farms are also supported by the tariff, both because power is comparatively pricier than that produced by traditional means and also because ecological considerations mean these energy sources are more desirable.

PSO Levy - the cost to energy consumers:

The tariff is set each year by the Department of Communications, Energy and Natural Resources.

On October 1st 2015 the PSO Levy decreased by 6.6% for the first time since 2011, to €60.09 (€68.20 including VAT).

PSO Levy increase history:

The table below highlights the monthly and annual changes in cost to the PSO Levy from 2011 - 2016. All rates are excluding VAT.

Year Monthly Levy Amount Annual Levy Amount  
2011 - 2012 €1.61 €19.33  
2012 - 2013 €2.32 €27.82  
2013 - 2014 €3.57 €42.87  
2014 - 2015 €5.36 €64.37  
2015 - 2016 €5.01 €60.09  

The levy is collected from the customers by the energy suppliers before being passed on to the Transmission System Operator (TSO) and the Distribution System Operator (DSO). These are the organisations which are responsible for the infrastructure of cables, wires, pylons, sub-stations, etc, which ‘carry the power’. It is the TSO which has responsibility for the distribution of PSO cash.

Following changes in legislation in the past few years, the PSO monies are available not only to the Electricity Supply Board (a large organisation operating several thermal, wind-powered, and hydroelectric power stations across the country), the PSO monies are also paid directly to the supply company and INDIRECTLY (via the supply company) to the generators.

For example, at the present time, the Renewable Energy Feed in Tariff (REFIT) enables domestic customers who install solar panels to receive payment for the solar power they generate from the PSO fund.

The REFIT scheme has the clear aim of encouraging alternative energy production. Nobody likes to pay more than they have to for energy, but the PSO is a great way of helping the planet by financing more sustainable power choices.