Every household in the country is to be compensated by €50 after being overcharged for more than a decade by ESB Networks.
It comes as the Commission for Regulation of Utilities (CRU) told an Oireachtas committee today that a subsidy scheme introduced to help large businesses over a decade ago has been discontinued and domestic customers will be reimbursed.
In a statement, ESB Networks said the company identified the issue and has been engaging with the CRU.
It said: "While the process and mechanism of the rebalancing is still to be determined with the CRU, ESB Networks anticipates that it will result in the reduction of a domestic electricity bill in the order of €50 in total."
CRU Chairperson Aoife MacEvilly told the Oireachtas committee that "in March of last year we decided, absolutely, that money will be paid back to domestic customers".
She was referring to a scheme that was intended to subsidise large energy users to the tune of €50m annually, which was billed to domestic customers, and ran from 2010 to 2022.
But it has emerged that ESB Networks overcharged domestic customers in the way it implemented the scheme, using a percentage rather than a fixed amount.
"Domestic bills were being charged more than we had directed," Ms MacEvilly said, adding that larger energy users have benefited from this.
"The only question now is final reconciliation and how we will reverse that," she told the Joint Committee on Environment and Climate Action.
She was responding to questions from Sinn Féin Senator Lynn Boylan, who has pursued the issue under Freedom of Information (FOI) provisions.
Senator Boylan repeated her calls that the total cost of the scheme be clarified, noting that figures including €600m have been mentioned.
Jennifer Whitmore TD, Social Democrats, said we also need to know how "a State entity misconstrued your direction to the point that they were overcharging for 12 years", and "how it took so long for it to be recognised".
"Fair enough", responded Ms MacEvilly, who pointed out that it was "an administrative error" from which ESB Networks "did not benefit".
The CRU chairperson also revealed that "2022 was one of the most challenging periods for the energy sector, and indeed for the CRU, since our inception".
The regulator remains "very concerned at the impact of high energy prices on households and businesses", she said.
But she noted that the electricity credit has helped to reduce customer debt, and that there has been a 30% increase in registered vulnerable customers, who are entitled to increased supports.
The CRU will put in place the new Public Service Obligation (PSO) levy "in the coming weeks", Ms MacEvilly said, adding that this would help customers.
The rate is calculated annually, and has been reduced to zero as of October.
The regulator will also continue to keep all customer protection measures under review as high costs are expected to continue.
Government attempts to increase energy security have had "a positive impact" but the market remains "volatile", Ms MacEvilly said, but warned that a "prolonged period of adverse weather could reverse some of these gains".
"We are all hiring at the moment in the energy space," she said, noting that recruitment is a priority for this year but that finding staff is "challenging".