Kerry TD Michael Healy-Rae has warned that it is “so wrong” to increase electricity prices while people are struggling through the coronavirus pandemic.

The PSO (Public Service Obligation) levy is today rising by over €50 for every household in the country.

The annual levy is used to support the renewable energy sector.

Last year, it was charged at €36.68 per year and today it is rising to €88.80, the second-highest level it has been at since it was introduced in 2010.

   

On Newstalk Breakfast this morning, Deputy Healy-Rae said now is not the time for electricity price hikes.

“I just think this is so wrong at this time because there is so much uncertainty with families and in lower-income homes where work is so uncertain at the moment,” he said.

“Students who would have always been able to contribute and help maybe at home by having part-time work and help themselves with the cost of their education can’t do so now because the jobs are not there.

“Mothers and fathers and single parents – everybody is really struggling.”

"Fundamental misunderstanding"

Meanwhile, environmental expert John Gibbons said there is a “fundamental misunderstanding” of what is happening with the increase.

“There is no reason that your electricity bills should go up next year,” he said.

“What the energy regulator has said is that they are adjusting the PSO this year which will average about €1 a week for a typical bill – which is about €54 a year.

“But what the regulator has said is that customers should renegotiate with their supplier and they can save – this is the regulator saying this – they would expect savings of about €300 if you shop around.

“The reason the PSO is going up is because wholesale energy prices are coming down. It is a mechanism that is used to maintain the market.”

"Nonsense"

Deputy Healy-Rae said it is “absolute nonsense” to tell people they can do better by shopping around.

“I am talking about real people this morning,” he said. “I am talking about people who are struggling; who don’t know where they are going to be working next week.

“We have counties who don’t know whether they will be shut down next week. People who are working today don’t know if they will have any work this day next week.

“For anyone to come on the radio and say this is actually alright because if you shop around you will save money. Now that is nonsense.”

Air pollution

Mr Gibbons noted that the PSO system has been in place for years and accused its critics of a “little bit of playing to the gallery.”

“I think if we are concerned about what it costs a household, we need to look instead at the health costs of air pollution,” he said.

“This was set out last week by the EPA. They worked out that we have a €2bn hit on air pollution costs. This is coming because of the combustion of liquid and solid fuels.

“If you are concerned about that, that works out at €400 for every man, woman and child in Ireland. We are paying that to subsidise the cost of ill health from burning fossil fuels so if you think that is good value, then good luck.”

Two electricity companies are also increasing their general prices today.

Electric Ireland and Prepaypower have said increases in their electricity network operating costs have forced the increases.

You can listen back to the debate on Newstalk Breakfast here: