An energy bill subvention for businesses, in which €50 million of ESB network tariffs was reallocated to residential users annually for more than a decade, was “perfectly valid” and “the right call”, Minister for Transport Eamon Ryan has said.
The measure, which was in place from 2009 to 2020, was designed to reduce the bills of high electricity users by increasing domestic customers’ bills instead. However, the Commission for Regulation of Utilities (CRU) told an Oireachtas committee this week, the measure was incorrectly applied with household customers now due a refund.
Mr Ryan on Wednesday said he had been supportive of the “rebalancing” mechanism.
“The balancing of tariffs on electricity was the right call to my mind. It was done because in our economy at the time energy prices to large industrial users were way above average and we risked losing employers and losing corporate tax and all the other income that those industries brought,” he said. “I think it was a perfectly valid decision for the people of this country, to make sure we had a strong economy that gave us the jobs and gave us the income to pay our way. So I believe it was appropriate.”
However, he ESB would have to return the overpayment because of an error in the way in which the tariff was applied, Mr Ryan said, which was likely to amount to €50 per bill payer. “The ESB should have applied it in a slightly different way and it was an understandable mistake, it’s a very technical issue. But having found that, they are going to be able to repay and that’s appropriate.”
Asked if the businesses that had benefited should repay the money, Mr Ryan said: “That would be an impossible task. You’d be going back 10 years and those companies might not even exist any more.”
Separately, Mr Ryan said there would be no “cliff edge” in the removal of energy supports to households, but they would have to be phased out.
“There won’t be a cliff edge, it won’t all end at the end of February, we’re all agreed on that. We do have to wind down from them the same way we did in Covid and the timing on that will depend on a deep analysis in terms of what’s happening with inflation. We will keep a close eye what’s happening with inflation as well as energy prices.”
The European Central Bank was likely to increase interest rates, and there would be cost of living pressures, but that would be dealt with in the Budget, he said.
Mr Ryan said the Government would keep “enough money in the locker” to put into households if interest rates continue to rise and energy prices fail to fall by the time of the next budget in October.
