The approximately 30 million electricity subscriber customers will not see the increase in the TICFE on February 1st reflected in the same way on their bill depending on the offer to which they subscribed.
A bill that will go down for some, up for others. As part of the 2025 finance bill, the government plans to increase the domestic tax on final electricity consumption. Lowered to an almost zero level (1 euro per MWh) during the energy crisis in order to relieve the electricity bills of the French, the TICFE has already risen to 21 euros per MWh at the start of the year. On February 1, 2025, the definitive exit from the tariff shield must bring it back to the level that it should have been without this exceptional system, that is to say 32 euros per MWh.
But the government intends to take advantage of the sharp drop in electricity prices to raise the TICFE well beyond this level. During the presentation of the text last Thursday, Bercy refused to give the amount of the excise which will be the subject of a decree in February “to take into account the strong uncertainty on prices excluding tax which will last until ‘at the end of December 2024’. A milestone has nevertheless been set in order to determine this amount: it must guarantee a 9% reduction in bills for customers who have opted for an electricity offer at the regulated rate. But this is not the case for all electricity subscribers. BFM Business takes stock of the consequences of this increase in the TIFCE according to the different types of offers.
• What are the components of the retail price of electricity?
Whether it is a market offer or a regulated rate, the retail price excluding tax includes identical costs for all suppliers such as those relating to access to networks also known as TURPE for “tariff use of the public electricity network. This “network tariff” is reviewed each year in August to take into account the increase in transmission costs for the distribution manager Enedis, which are paid by suppliers and passed on to consumers, individuals and professionals.
There are also variable costs on which suppliers act to differentiate the price of their offer: this may be the cost of production or supply of electricity, commercial costs or even their margin.
Finally, contributions and taxes constitute the third brick of the electricity bill alongside the “network tariff” and the cost of the electricity itself. There are four of them. First, the internal tax on final electricity consumption (TICFE) which is collected by customs and now includes departmental and municipal taxes on final electricity consumption. There is also the transport tariff contribution (CTA) which “makes it possible to finance the specific rights relating to old-age insurance for personnel covered by the electricity and gas industries regime” as explained on the website of the Regulation Commission of energy (CRE). Finally, VAT applies at 5.5% on the subscription and the CTA and 20% on the proportional share (including excise on electricity) for subscribed power less than or equal to 36 kVA.
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• How will customers’ bills at the regulated rate evolve?
The regulated electricity sales tariff (TRVE) concerns more than 20 million customers. It is set by the public authorities after a proposal from the CRE. Each year, it is revised twice: a first time at the start of the year via the amount of the TICFE (formerly Contribution to the public electricity service) and a second time in August via the kWh rate. Regulated electricity sale rates are offered by historic suppliers: EDF which markets it over 95% of French territory through its blue rate, the peak/off-peak rate or the Tempo offer as well as around a hundred local distribution companies (ELD) which correspond to the remaining 5%.
According to the CRE, as of February 1, 2024, the TRVE bill of a residential customer finances half the electricity supply (54%) and the electricity network 22%. VAT only accounts for 15% of the invoice while TICFE only represents 7% and the transport tariff contribution (CTA) 2%.
While Bruno Le Maire promised a 15% reduction in bills for TRVE customers, this will ultimately be 9% on average on February 1st. Furthermore, the share of TICFE in the bill of these customers should increase significantly at the same time.
• Why will invoices go down for certain indexed price market offers and not others?
Market offers with indexed prices appeared when the market was opened to alternative suppliers and competitors of EDF in 2007. Some offer a price per kilowatt hour indexed to the evolution of the regulated tariff. As of February 1, customers who have subscribed to a market offer with a price indexed to the regulated tariffs will see their bill reduced in the same proportion as those who have opted for the regulated tariff, that is to say by approximately 9%. According to the Ministry of Budget and Public Accounts, 80% of households are under regulated tariffs in total.
Part of the remaining 20% chose a market offer with a price indexed to other indices such as wholesale markets (spot prices from the European EPEX stock exchange) or the Arenh mechanism (regulated access to electricity historic nuclear power) which allows alternative suppliers to benefit from a preferential rate for access to nuclear electricity from EDF but which will disappear at the end of 2025.
Unlike customers whose contract is directly or indirectly linked to the regulated tariff, the bill for these customers is expected to increase on February 1, 2025.
• What about customers of fixed price market offers?
Fixed-rate electricity contracts also appeared in 2007 for individuals. Through these contracts, suppliers commit to an unchanged price per kilowatt hour excluding taxes for a fixed period of one to three years. Individuals who have opted for this type of offer in recent years have already benefited from sharp drops in market prices. For them, the increase in the TICFE will, however, result in an increase in their bill since the electricity price part does not change by definition.
“The 20% (of customers) who have unregulated prices can easily switch to regulated prices,” however, reminds the Ministry of Budget and Public Accounts to AFP.
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