Rise in the price of electricity: we explain to you why EDF is filing an appeal against the government

The quarrel between EDF and the State continues. The CEO of the electricity giant announced, Thursday, May 12, having filed a “equitable relief” against the government’s decision to allocate additional volumes of cheap nuclear electricity to its competitors, in order to limit the rise in bills. And this is not the first time in recent months that EDF has revolted against its main shareholder. Franceinfo returns to the causes of the spark.

What is this appeal?

“I have just sent the State a gracious appeal to request the withdrawal” of the obligation made to EDF by the government to supply electricity at reduced prices to its competitors, declared Thursday Jean-Bernard Lévy, the CEO of the group, on the occasion of the general meeting of the company. “Both the price and the conditions of these allocations penalize us considerably”he argued.

In addition to this administrative procedure, “EDF will take all measures to preserve its rights that it deems useful”added to AFP a spokesperson for the group, specifying in particular that the latter reserved the “possibility of seizing the competent courts”. “We take note of Jean-Bernard Lévy’s decision”, reacted the Ministry of the Economy.

Why does EDF have to supply cheap electricity to its competitors?

With the opening of the market to competition, EDF has been obliged since 2010 to sell part of its electricity to other French energy suppliers at a fixed price of 42 euros per megawatt hour (MWh), while the prices on the wholesale markets exceed 200 euros per MWh. This mechanism is called regulated access to historical nuclear electricity (Arenh).

But as this quantity of electricity at bargain prices is limited, EDF’s competing suppliers must also go abroad to supply themselves. Due to soaring prices in recent months, it costs them more than before. This affects the customer’s bill.

To contain the rise in French electricity bills to 4% in 2022, the government has therefore forced EDF since April to increase by 20% the annual quota of electricity sold at a reduced price to its competitors, to 120 terawatt hours (compared to 100 TWh previously), at a price of 46.20 euros per MWh for this additional volume.

What does EDF blame for this obligation?

After raising the Arenh ceiling, EDF warned of a plunge in its financial result in 2022 of some 10 billion euros, including 8 billion linked to the measure. However, this significant financial manna, EDF needs it to “invest in its projects, to maintain its current production facilities and in new means of production essential to meet the electricity needs of France and Europe”explained on franceinfo at the end of January Amélie Henri, union representative CFE-CGC Energies. For the unions, other measures were possible, such as a VAT reduced to 5.5% on the price of electricity, against 20% today.

For its part, the entourage of the Minister of the Economy, Bruno Le Maire, recalled Thursday that “the measure taken by the government at the beginning of the year [avait] enabled the French to avoid a 40% increase in electricity”. Lhe consumer association UFC-Que Choisir also came out at the end of April in favor of the State’s decision, warning that a “cancellation of the increase in the Arenh ceiling could lead to a tariff catch-up of 16%”. To soften the measure imposed on EDF, the State has moreover bailed out the electrician to the tune of 2.7 billion euros in March.

Have other procedures already been initiated by EDF?

Before this gracious recourse, IEnergy giant workers called to strike, January 26. The group’s unions accused the government of organizing the “spoliation of EDF” and believed that he was acting for a purely electoral purpose, a few months before the presidential election.

The unions and the six salaried directors of EDF also challenged the government’s decision in summary proceedings before the Council of State, without winning their case. “In a context of a sharp rise in prices on the wholesale electricity market, causing significant repercussions for both private individuals and professionals, the judge in chambers considers that the contested measure presents in these conditions a public interest”decided the institution, on May 6.

However, this emergency decision does not signal the end of the litigation: the trade unions and directors of EDF have also appealed to the Council of State for annulment, as well as the European Commission, considering that this increase in the ceiling of the Arenh is contrary to European law.

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