EU windfall energy tax
Deputy O'Donnell asked how quickly EU windfall gains from energy companies would be taxed and passed on to households and businesses. The Minister said proposals were moving through EU institutions, outlined the emerging windfall levy and added that the fossil-fuel solidarity payment would be more complex.
We are speaking about the price of energy. One of the core aspects of that is the fact electricity is priced at the wholesale price of gas in the European market. Discussions are taking place on this at European level. What form does the Minister expect the tax on the windfall gains of the energy companies above their cost of production to take? How quickly does he expect a decision to be taken and in what form will it come to the Government? Will it be in the form of a fund we receive from Europe and, if so, how quickly will we be able to disburse it to hard-pressed households and businesses? Or will it come in the form of a reduced electricity charge when users get their bills? I am asking about the form and timeframe of the support. People are under huge pressure and we are looking at a myriad of issues here in terms of costs. There are energy companies producing electricity at a fraction of the cost they are charging-----
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-----because they are able to price the energy at the market price of gas in Europe.
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Proposals were discussed at the Energy Council on 9 September and the Commission produced more specific proposals on 14 September. The Energy Council will meet again on 30 September, when I expect us to sign off on the proposals. They are not finalised and discussions are still going on at COREPER but the broad outline is clear. We will seek to take that windfall gain from the electricity markets from those generators that are not generating gas, where there is a surplus. The Commissioner is suggesting that should be done where the surplus is above a price of €180 per megawatt hour. The Commission leaves it up to countries as to what to do with such a gain. In my view, it should go back directly to the consumers. We should use the electricity bill payments system to help reduce costs rather than the proposal for a cap we discussed earlier.
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The solidarity payment on fossil fuels is slightly different. It has greater complexity for us for a number of reasons but the basic principles should apply.