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Adviser urges French court to end regulated gas tariffs
July 7, 2017 / 4:58 PM / 3 months ago

Adviser urges French court to end regulated gas tariffs

PARIS, July 7 (Reuters) - France should repeal a decree regulating gas prices which rivals say gives an unfair advantage to energy group Engie, a senior counsel of France’s highest administrative court said on Friday.

A final decision of the Council of State, which most of the time is based on the counsel’s recommendation, is expected by the end of July and could end regulated gas tariffs in France.

ANODE, a lobby for alternative retail energy suppliers, had taken the matter to the court.

The association said the regulated prices under which about 5.5 million sites, including half of France’s residential clients and 11 percent of professional users continue to buy gas from Engie, was hampering competition and keeping prices high.

Engie could not immediately be reached for comment. The company has said in the past that the regulated priced enabled it to meet public service obligations, including guaranteeing the security of supply, while the French government has said the mechanism protects the long-term purchasing power of consumers.

The counsel argued the regulated prices were against European Union regulations, and that the French system was not justified, neither by the argument it guaranteed security of supply, nor that it set a reasonable price for gas.

“There is no economic interest for the regulated gas prices that justifies hindrance to full competition in the market,” Marie-Astrid de Barmon said in her conclusion.

“For these reasons, we conclude that the decree should be annulled,” she said.

In September 2016, the European Court of Justice ruled the regulated tariffs were an obstacle to a competitive gas market, but could be justified under certain conditions.

France’s antitrust body ruled in 2013 the country should gradually phase out the regulated gas tariffs because they hindered competition and keep prices artificially high. (Reporting by Emmanuel Jarry and Bate Felix; Editing by Mark Potter)

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