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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) Levy.

The PSO Levy makes up part of each domestic and small commercial customer electricity bill and 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 this kind of power is comparatively pricier than that produced by traditional means and also because ecological considerations mean these energy sources are more desirable.

The Levy is collected at the same time as payment for the power which has been used, and it is displayed as a separate charge on your bill.

PSO Levy - the cost to electricity consumers

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

On October 1st 2016 the PSO Levy increased, from €60.09 (€68.20 including VAT) to €70.75 (€80.30 including VAT).

In July 2017, the CER confirmed that the PSO Levy for 2017/18 will increase again, to €7.69 per month, or €92.28 per year (€104.74 including VAT).

PSO change history

The table below highlights the monthly and annual changes in cost to the PSO Levy from 2011 - 2018. 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  
2016 - 2017 €5.90 €70.75  
2017 - 2018 €7.69 €92.28  

The levy is collected from the customers by the energy suppliers before being passed on to the Transmission System Operator and the Distribution System Operator, which are the organisations responsible for the infrastructure of cables, wires, pylons, sub-stations, etc, which ‘carry the power’.

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), but are also paid directly to the supply company and indirectly (via the supply company) to the generators.

For example, one way in which the PSO fund is used at the moment is to provide payment, via the Renewable Energy Feed in Tariff, to domestic customers who install solar panels for the solar power they generate. This scheme has the clear aim of encouraging alternative energy production.

While nobody likes to pay more than they have to for energy, the PSO is a great way of helping the planet by financing more sustainable power choices through schemes like this.