How are electricity tariffs calculated?

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How are electricity tariffs calculated?

All SSE Airtricity Energy Solutions electricity customers are charged based on their kilowatt hour (kWh) consumption, as well as a daily standing charge. These tariffs are made up of the elements listed below, with Value Added Tax (VAT) and the Government-mandated Public Service Obligation (PSO) Levy listed separately on customer invoices. Higher-usage customers (DUoS group DG6 or above based on the MIC) are also charged a pass-through ‘capacity element’ on their invoice to ensure availability of contracted maximum capacity. All tariffs vary based on a customer’s DUoS group and profile type as determined by ESB Networks.

SSE Airtricity Energy Solutions electricity tariffs are made up of a combination of three main elements:

  • Wholesale energy costs which relate to the cost of purchasing power over time to meet customer demand, which is subject to seasonality and relates to market conditions and forward commodities at the time of purchase
  • Pass-through costs which are set by a number of different regulatory and networks bodies and passed on to all suppliers to cover costs including transmission and distribution
  • Supplier margin required to cover all operating costs as well as explicit margin for running a commercial business

All customers are also subject to payment of VAT, as well as the PSO Levy, which is a charge relating to the costs of purchasing peat-generated electricity and the output of renewable, sustainable or alternative forms of energy purchased under various Government schemes. All electricity suppliers are obliged by the Irish Government to apply these charges in the interests of security of supply and environmental protection.

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