Electricity: UFC-Que Choisir calls for a "freeze" on tariffs

Europe 1 with AFP / Photo credit: JACQUES LOIC / PHOTONONSTOP / PHOTONONSTOP VIA AFP 13:15 p.m., January 12, 2024

UFC-Que Choisir on Friday asked the government for a "freeze" on the regulated electricity tariff (TRVE), a few weeks before an announced increase, while market prices have eased in recent months. "UFC-Que Choisir today denounces the prospect of a new increase in the price of electricity of 10% on February 1 unrelated to the real costs of electricity production in France, and is alarmed by the dramatic consequences it would have on households," it warns in a statement.

>> ALSO READ – Inequalities in access to care: UFC-Que Choisir takes the State to court for "inaction"

The consumer protection association is asking the new government "to show its willingness to work for the preservation of consumers' purchasing power by freezing the increase (...) or at least by limiting it so that it does not exceed 2.5%, i.e. the inflation expected in 2024". For several months now, the executive has been organising the gradual exit from the tariff shield, which has been deployed since the end of 2021 to moderate the impact of the surge in gas and electricity prices caused in particular by the war in Ukraine.

Tax hike by the government

The government has already almost doubled the excise duty on gas - a tax paid by natural gas suppliers - since 1 January, which is expected to drive up the bill for subscribers. And it could also increase the price of electricity in February. The regulated tariff, which is available to the majority of households, is reviewed twice a year, on 1 February and 1 August. The government has repeatedly mentioned an increase of no more than 10% in February in recent months.

The Energy Regulatory Commission (CRE), the sector's watchdog, proposed this week, before taking into account taxation, a stable price (+0.01% excluding tax) for individuals and a slight decrease (-3.67% excluding tax) for professionals, given the "drop in the cost of supply" due to the "easing of prices on the wholesale electricity market in 2023".

However, this moderation in prices could be undermined in the event of a tax increase by the government. The CRE said it had worked, at the request of the executive, on two hypotheses: in the event that the government decided to maintain the excise rate on electricity "at its current level of 1 euro/MWh", the variation in TRVE would be "-0.01% including tax for residential customers and -3.59% including tax for non-residential customers". On the other hand, in the event that the excise tariff is "increased to the level of the ceiling set by the Finance Law for 2024 of 22.54 euros/MWh", the variation in TRVE would be "+10% including VAT for residential customers and +6.20% including VAT for non-residential customers", according to the CRE.