Regulated electricity prices no longer protect consumers, report says

Margaux Fodéré, edited by Solène Leroux 06:23, July 05, 2022

Without the price shield put in place by the government, regulated electricity prices would have increased by 35% in February.

This is confirmed by the Court of Auditors in a vast report which examines the electricity markets in France.

After the Competition Authority, the institution denounces the method of calculating these prices which no longer protects consumers against rising prices.

The original principle: alternative electricity producers get their supplies from EDF, at a competitive price, to guarantee consumers lower prices.

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The prices of alternative producers

But for three years, their needs far exceed the volume of electricity they can buy from EDF.

They are therefore forced to get more supplies on the markets, where prices are currently exploding.

However, the regulated tariffs, that is to say the tariffs supervised by the State and applied by EDF, are indexed on the supply costs of alternative producers.

So, mechanically, if the supply costs of alternative producers increase, the regulated tariffs also increase.

The tariff shield as reinforcement

The system has also caused prices to explode: the electricity bill of 24 million French people would have increased by 35% if the government had not put in place the price shield.

For the Court of Auditors, it is therefore necessary to review this mechanism, the ceiling and the price at which alternative producers obtain supplies from EDF.

But for that, you need the agreement of the European Commission.