EC State aid inquiry into French electricity tariffs

DG Competition notice that it has begun an inquiry into possible State aid granted to industrial electricity users in France through the operation of regulated tariffs.

Industrial customers who have never switched away from EDF benefit from the lowest regulated tariffs. Higher "transitional" regulated tariffs (but still below open market prices, according to DG Competition) are available to customers who have switched (Article 15 of the 2006 law). Customers can obtain transitional tariffs from suppliers other than EDF, and the supplier is compensated with revenues from a public service obligation levy (Article 16).

In November 2006 The French constitutional court struck down (decision in French) on EC law grounds a legislative proposal (in Article 17 of the 2006 law) that would have given a right for industrial customers who had switched from EDF's regulated tariff to other suppliers (when prices on the open market were below the regulated tariff) to return to EDF on the original regulated tariff.

In February 2007 DG Competition consulted on possible State aid in Spanish electricity tariffs. The French inquiry has not reached this stage yet, and may be more complicated due to the role of EDF (majority owned by the French State) in providing alleged State aid to its customers, alongside the alleged State aid from transitional tariff compensation arrangements.

For further information or advice please contact Franck Latrémolière.

Filed under DG Competition, Electricity, France, State aid.

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