INDUSTRIES FACE a second potential hike in their energy costs from next month as the State plans to reduce credits allowed to businesses that use large amounts of electricity.
Businesses such as pharmaceutical companies, food processors and heavy industries, which need large quantities of energy to operate, benefit from a credit system introduced last year worth anything from €1,100 a-month to much larger sums, depending on the amount of power they use.
The Commission for Energy Regulation (CER) said yesterday that the State planned to cut this by about 44 per cent from October 1st – thisis the same day that industries will face four-figure increases in their bills as a result of a proposed public service levy that will be imposed on all electricity customers. The reduction in credits will add a more than €60 million to the sector’s electricity costs over the following 12 months.
The same industries will also pay most of the €157 million that the public service charge will raise.
According to some calculations, the combined impact of the public service charge and the reduction in credits could add about €1,800 a month to a “typical” pharmaceutical plant’s electricity bill, although the costs would vary widely according to individual companies’ energy needs and use.
The credit is being cut as it was introduced as a temporary measure to ease the pressure on industries’ costs and protect jobs, as most of them employ large numbers of people.
The Department of Communications Marine and Natural Resources said yesterday that the credit would effectively remain the same, as the State intended handing €50 million related to electricity network charges back to the same industries over the next year.
A spokeswoman said that as a result of a range of measures, including a contribution from State-owned ESB’s profits last year, large energy users’ electricity bills will have received supports worth over €500 million between 2009 and 2012.
The Government intends paying for the credits through a carbon windfall levy that it imposed on most electricity generators last July. The case raised from that measure will come to an estimated €80 million over the next year.
The windfall tax will end in 2012, and is expected to raise about €175 million over its lifetime.
When it was introduced, the Minister for Energy, Eamon Ryan, said the Government was committed to returning this cash to large energy users in order to protect jobs.
