Public Service Obligation (PSO)
The Public Service Obligation (PSO) Levy or Payment, is collected from or paid to all electricity customers to fund schemes to support national policy objectives related to renewable energy for Ireland. The PSO is key to enabling Ireland to meet its national targets in terms of the generation of electricity from renewables and aligns with the CRU’s vision of achieving a secure, low-carbon future.
What is the PSO Levy?
The Public Service Obligation (PSO) levy is charged or payments made to all electricity final customers to fund schemes designed by the Irish Government in support of national policy objectives.
Over a number of years, the PSO has included several schemes, and currently supports the Renewable Electricity Feed-In Tariff (REFIT) and the Renewable Electricity Support Scheme (RESS), which provides support payments to suppliers to contract with eligible renewable generation projects.
The PSO Levy due from or the PSO Payment due to final customers applies from the 1 October to 30 September every year. Whether the PSO is positive and a PSO Levy is due from the final customer, or whether the PSO is negative and a PSO Payment is due to the customer is dependent on wholesale electricity prices.
When wholesale electricity prices are high, mostly because of high gas prices, renewable generators, which do not require gas, receive greater revenues for the electricity they sell in the wholesale market and little or no support may be required. Moreover, under the terms of the schemes the benefits of lower cost renewable generation are required to pay back the customers through a PSO Payment. Conversely, when wholesale electricity prices are low, the proceeds of the PSO Levy are used to contribute to the additional costs incurred by PSO-supported electricity generation which are not recovered in the electricity market, typically via contracts that suppliers have in place with electricity generators.
The CRU’s role is to calculate the PSO levy or PSO payment annually in accordance with Government policy and to help ensure that the scheme is administered appropriately and efficiently.