CONSUMERS AND businesses will pay a levy of €92 million to wind farms and peat-fired electricity plants over the next 12 months, a 40 per cent reduction on the amount paid over the previous year.

The State imposes a public service obligation charge on all electricity users in the Republic, which is used to pay for financial support given to wind farms and peat-burning power plants.

Electricity users paid €156 million over the last 12 months. The amount is tied to the market price for power and is changed in line with this every October.

Following a decision by industry watchdog the Commission for Energy Regulation, the total amount to be charged to electricity users over the next 12 months will be €92 million.

The reduction means that a €2.56 a month charge imposed on each household over the last 12 months will be cut to €1.61. This will translate into a €3.22 on domestic bills, as they are issued every two months.

Small businesses will each pay €57.22 a year or €4.77 a month, a reduction on the €8.25 a month that they paid over the last year.

As the electricity market was fully deregulated this year, suppliers are not obliged to pass the cost on to their customers, although most did over the last 12 months.

The bulk of the cost will fall on medium-sized and big companies and organisations that use large amounts of electricity.

They paid €72.5 million of the total collected over the last 12 months. On this basis, they will pay about €57 million between now and next October.

The charge is imposed to pay for the guaranteed prices for electricity paid to peat plants owned by the ESB and all wind farms.

It is Government policy to support these businesses, but the regulator administers the charge.