An increase to the PSO levy is taking place in October this year.
The increase will mean an additional €52 a year on all household electricity bills (including VAT).
This 130% increase to the PSO levy will kick in from October 1st 2020.
What is The PSO Levy ?
The PSO Levy (Public Service Obligation) is a charge that all electricity customers in Ireland have to pay. It helps to cover the costs associated with producing sustainable and renewable energy in Ireland.
The PSO levy is currently €2.84 a month (ex VAT) which is €36.68 a year including VAT.
It will rise to €6.52 a month from October 1st 2020. This is an increase of €3.68 a month or 130% . VAT is charged on the PSO levy at a rate of 13.5%, bringing the monthly amount to €7.40.
The total annual PSO Levy per electricity customer from October 2020 will be €88.80 inclusive of VAT . Increased by €52.12 from 2019
You will see the PSO Levy on your electricity bill as €13.04 (€6.52 x 2 on a typical 2-monthly bill).
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History of the PSO Levy
The PSO levy was reduced in 2018 and 2019 – therefore the levy in 2020 will be lower than it was in 2017.
As you can see from previous articles on the PSO Levy – it will have risen from €19.33 in 2011.
All domestic electricity customers are charged the PSO levy at the same flat rate – regardless of how much electricity is used. This means that a single person using very small amounts of electricity will pay the same PSO levy as a large family using much more electricity.
There have been suggestions that the PSO levy should be based on a percentage of electricity usage – so higher usage would mean a higher PSO levy.
The government say this can’t be done because of EU rules. Apparently, this is to do with the fact that levies tied to consumption that help Irish energy producers can’t be applied to imported electricity too.
For an average electricity bill of €1013 a year – the PSO levy will make up 8.7% of the bill from October 2020.
For a smaller household with an annual electricity bill of €609 – the PSO levy will be a much larger proportion (14.4%) of the total bill.