Recent hikes in energy levies will lead to an annual increase of €9,000 in electricity charges for the average convenience store and a minimum €13,000 increase for a supermarket, the industry has said.
The Commission for the Regulation of Utilities (CRU), which is the energy regulator, recently approved an increase in so-called “use of system” charges, which will see an average increase of €8.42 per month on a domestic customer bill for the 2024/25 tariff year.
Furthermore, the CRU has set the public service obligation (PSO) levy, which is a fund to boost green energy development, to €3.23 per month for families and €12.91 per month for businesses. For the past year, the charge to both groups was zero.
Large energy users, including data centres and manufacturers, face increases tied to the actual amount of electricity they use.
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RGDATA, an organisation representing 3,000 independent grocery and convenience stores and supermarkets, has called on the Government to initiate an “urgent review” into the range of charges and costs being imposed as part of electricity bills.
It said the impact of hikes in the PSO levy and use of system charges will “completely erode” the benefit of energy credits granted in Budget 2025.
It also noted that the temporary 9 per cent rate of VAT for energy is only being extended until April.
RGDATA director general Tara Buckley pointed out that modern grocery and convenience outlets use high levels of electricity for lighting, refrigeration and air conditioning. Consequently, energy costs represent a significant operating overhead.
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“The announcement in Budget 2025 of a new power up grant of €4,000 per company in the retail and hospitality sector is welcome,” she said.
“However, the reintroduction of the PSO Levy and increases in the use of system charges from October 1st will fully erode the benefits of the new Budget 2025 energy grants for most retailers.
“On top of that electricity companies are making ginormous profits whilst charging these extortionate levies on SMEs that are already struggling to make a living due to all the extra costs and charges being piled on them by Government and regulators.”
She said the changes in the PSO Levy and the use of system charges will lead to an increase of €9,000 in annual electricity charges for the average convenience store and a minimum €13,000 increase for a supermarket.
“One supermarket owner examined their increases in use of system charges and confirmed that they have paid €50,000 in increased levies from September 2022 on top of horrendous increases in energy charges,” she said.
Ms Buckley said SMEs feel “neglected and unsupported” by the Government and called for a review of the charges. “This is a real case of the State giving with one hand while taking away with another,” she said.
“There is little sense in one agency of the State giving grants to manage increased costs, including energy costs, if other arms of the State are hiking costs by increasing levies and charges.
“It is time for this Government to actually deliver on all the pronouncements it has made about supporting SMEs. The 3,000 SME business owners that RGDATA represents feel extremely neglected and unsupported by this Government, so they need to act now.”
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