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French independent power firms demand end of regulated tariffs
November 28, 2017 / 2:09 PM / 15 days ago

French independent power firms demand end of regulated tariffs

* End to tariffs could save consumers 2.5 billion euros

* Anode wants tariffs phase-out over four-year period

* State Council rulings awaited on gas and power rates

By Geert De Clercq

PARIS, Nov 28 (Reuters) - French consumers could save as much as 2.5 billion euros ($3 billion) a year if the government stopped setting electricity prices, independent producer lobby Anode said on Tuesday.

A decade after liberalisation, former monopoly EDF retains an 84 percent share of the retail power market, with the vast majority of its customers on regulated tariffs.

A study commissioned by France’s association of independent power producers Anode said that if all retail customers on regulated tariffs were to switch to the most competitive market offer, their combined gain in purchasing power would add up to 2.5 billion euros.

Anode chairman Fabien Chone -- who is also deputy CEO of Direct Energie one of EDF’s competitors - called on the government to gradually phase out regulated power and gas tariffs over a four-year period.

“It is in the interest of French consumers to end regulated power tariffs,” Chone told reporters.

Anode proposes scrapping regulated tariffs for new contracts from next July and ending them completely by mid-2022.

Although they could save on their monthly bills, French consumers remain reluctant to take the time to shop around for a new power supplier.

In Britain, the government has said it plans to impose a price cap on the energy market to help millions of households. EDF is also one of the “big six” energy providers in the British market.

Philippe de Ladoucette, former head of energy market regulator CRE, said regulated tariffs keep power prices high, are an obstacle to market entry for new players and slow down innovation in electricity markets.

De Ladoucette said the state, which for years has received billions of euros in dividends from 83 percent state-owned EDF, has never done much to promote competition.

“At a time when a number of taboos have been blown up under a new president, maybe it is time to blow up regulated tariffs,” de Ladoucette said.

He added that regulated tariffs are not necessary to guarantee fair power prices in remote regions nor for providing low-cost power to poor households.

Since 2014, EDF’s tariffs are determined with a formula that includes the cost of grids, nuclear energy, wholesale market purchases, and retail.

In July, following a complaint by Anode, the State Council - France’s highest administrative court - ruled that France’s regulated gas tariffs are incompatible with EU legislation.

Chone said the government had not indicated when it would act upon the Council’s ruling and that it had filed a new complaint to get the ruling implemented.

Anode has also filed a claim to overturn power tariffs with the State Council, but the court has yet to rule on that. ($1 = 0.8405 euros) (Reporting by Geert De Clercq and Benjamin Mallet)

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