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PARIS, March 25 (Reuters) - France’s competition authority said on Monday a planned increase in regulated power tariffs proposed by energy regulator CRE was not in consumers’ interest and asked the regulator to reconsider its recommendation.
In January, the CRE proposed to increase state-controlled utility EDF’s regulated power tariffs by 7.7 percent excluding taxes (5.9 percent tax included), which would be the highest increase in years.
France’s Autorite de la Concurrence said in a statement on Monday the CRE proposal was unfavourable for the 28 million clients on regulated tariffs because about 40 percent of the proposed increase did not correspond to an increase of EDF’s costs but was rather aimed at allowing EDF’s smaller competitors to propose prices similar to or below regulated tariffs.
The antitrust body said France needed more power market regulation in order to boost competition and that the ARENH mechanism that gives EDF competitors access to nuclear energy production was in urgent need of reform.
It added that it had recommended the government review the legality of the proposed increase before May 7 and that it had also recommended the CRE review its proposal.
Amid a nationwide “yellow vest” protest movement against high prices and government reform policies, the proposed power price hike is a highly sensitive topic.
In December, the government had promised not to implement the proposed increase before the end of winter. On Friday, Environment Minister Francois de Rugy said power tariffs would increase in mid-2019 but he did not specify by how much. (Reporting by Geert De Clercq Editing by Bate Felix and David Evans)