The Government has the power to take a “special dividend” from State-owned energy companies which is “under consideration” to help people with utility bills, Taoiseach Leo Varadkar has said.
Mr Varadkar said the Government is planning to legislate for a windfall tax on private energy companies in the coming weeks.
The Taoiseach was responding during Leaders’ Questions in the Dáil to Labour leader Ivana Bacik, who said her office was “inundated with correspondence” from householders and small business owners who cannot pay their energy bills.
Ms Bacik said Labour representatives have been hearing from pensioners who have had to “resort to taking out credit union loans just to meet the cost of their energy bills”.
The Dublin Bay South TD said while wholesale electricity prices were falling, providers were refusing to pass that benefit on to families and households despite “record-breaking eye watering profits”.
In response, Mr Varadkar said utility bills were “very high” and that Pinergy and Electric Ireland had announced reductions for its customers which was “not enough”.
“It’s nowhere near enough,” he said. “Wholesale prices are now coming down. I understand that there is a lag between wholesale prices coming down and retail prices for homeowners and businesses coming down. I get that, but it shouldn’t be too much of a lag.
“It only took a few months for prices to go up. It should only take a few months for prices to go down and we expect to see electricity and gas companies reduce their prices over the course of the next months for businesses and for residential customers as well.”
The Taoiseach said this wouldn’t just be about “polite encouragement” with a windfall tax that would be legislated for in the Dáil and the Seanad in the coming weeks.
“That will allow us to recoup some of the profits and give them back to people in the form of reductions in bills,” he said.
“We have to work out the exact mechanisms around it, that’s what we intend to do. Also, we’ll be saying to State owned companies for example, that if you make hyper profits, we have the power to take some of it off you in the form of a special dividend and use that money to help people as well.”
The Fine Gael leader later added that the special dividend was “certainly something under consideration”. Mr Varadkar said the windfall tax would include two elements – a “super tax” on the profits made by the Corrib gas field and various distilleries as well “an element of tax” on generators.
“That money gets recycled then into reducing bills for people and that’s what we intend to do,” he said.
