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Consumers Foot Bill As Energy Companies Cash In On Green Taxes

THE big electricity suppliers have been given the go-ahead by the [Irish] Government to make unlimited profits from a green energy scheme which, while funded by the planned 5% hike in electricity prices, offers consumers no guarantee of future reduced bills.

Consumers will have to start paying the 5% Public Service Obligation (PSO) levy next month.

The levy is aimed at generating €30 million this year for the REFIT scheme so that the country’s wind farmers can be sure of a minimum price for the electricity they generate.

The wind farmers sell on the electricity to the big electricity companies such as the ESB, Bord Gáis and Viridian, who have the potential to reap enormous profits when the price of a unit of electricity soars beyond that minimum price.

However, under the REFIT scheme, the big electricity companies are under no obligation to pass on any of these profits to electricity customers in the form of reduced bills.

Consumer, business and hotel representative groups all reacted angrily to the price-hike when it emerged last month, saying it puts cash-strapped households and businesses under further pressure.

A number of smaller wind farm operators have said the structure “essentially allows electricity suppliers to have their risk underwritten by the Irish electricity consumer and yet retain all their eventual profits”.

Chief executive of Galeforce Energy John Kingston has called for the REFIT scheme to be revisited so that consumers can have a return benefit for their investment in the industry.

Mr Kingston runs a 4.62MW commercial wind farm near Dunmanway.

“This Government has already committed Irish citizens to carry the burden of the property bubble and is now heaping even more financial burden on the domestic, commercial and industrial electricity-user through the PSO levy. It will never be a good deal for the Irish electricity consumer,” he said.

The Irish Wind Energy Association (IWEA), which counts many of the main electricity suppliers among its members, said consumers will benefit in the long-term as bills will decrease as wind outstrips coal and gas in the electricity mix.

Irish Examiner, 27 September 2010