For its part, the competition authority recommended that the government prepare the exit from regulated electricity tariffs (TRVE), considering that this offer “limits the development of competition in retail markets”.
Policeman against policeman: the competition authority recommended on Tuesday to the government to prepare the exit from regulated electricity prices (TRVE), subscribed by a majority of households to protect themselves from market ups and downs, a position contrary to that of the Energy Regulatory Commission (CRE), which recommends maintaining this offer. For the competition watchdog, this offer, the price of which is set by the public authorities, on a proposal from the CRE, “limits the development of competition on the retail markets”.
Regulated prices “capture a significant part of the demand” from individuals and businesses “who are thus removed from the competitive game”, estimates this independent administrative authority attached to Bercy, responsible for combating anti-competitive practices by businesses. Consequently, it recommends “preparing in a concrete manner for the abolition of TRVs, without renouncing the public policy objectives attributed to them, but by allocating better targeted instruments to them”.
The CRE defends an offer which allows the “smoothing” of prices
An opinion that is not shared by the Energy Regulatory Commission (CRE), another independent authority, responsible for guaranteeing the proper functioning of French energy markets for the benefit of consumers. On Tuesday, she recommended to the government that the TRVE system be maintained for five years. While the energy crisis which followed the war in Ukraine caused energy prices to soar, placing them at the heart of the political debate following the latest electoral votes, she emphasizes that the “smoothing” of prices “over a long period of time period helps to mitigate the impacts of market variations.
Due to the post-Covid recovery and the war in Ukraine, electricity prices have jumped by more than 43% over two years, despite the price shield established by the State. For the first time since the start of the energy crisis, consumers benefiting from regulated or indexed tariffs should experience a significant drop on February 1, 2025, of around 9%, due to a drop in prices. electricity, and despite the increase in a tax and the end of the tariff shield. The French estimate that the amount paid in addition to their energy bill this year is 213 euros on average, according to an Odoxa survey published this week on behalf of Voltalis, a company specializing in energy savings.
Today, “only TRVEs offer this smoothing” allowed to the 59% of French residential consumers who fall under these tariffs, and to the 16% who have subscribed to an offer indexed to these regulated tariffs, estimates the CRE. She underlines that despite market offers “much cheaper (up to 15 or 20%)” for several months, there is “low mobility of TRVE customers towards market offers”, which demonstrates that “price is not the only criterion”. The CRE therefore underlines the “major role” that these tariffs play “for the benefit of the consumer” and considers at the same time that these prices, the amount of which is set by the public authorities on a proposal from the CRE, “are compatible with the proper functioning of the market and the development of competition.
The government should advocate for maintaining the TRV
“I note that the two authorities (…) have opposing conclusions on certain points,” reacted Energy Minister Olga Givernet in a statement to the press. The government must, based on these divergent recommendations, draw up a report for the European Commission, with a view to the disappearance at the end of 2025 of Arenh, a system negotiated with Brussels to allow the emergence of competition for EDF and which provides for the provision of alternative electricity suppliers.
If she does not comment on the conclusions of the future report, Olga Givernet underlines the “strong” attachment “of the French, and of the national representation” to regulated prices, which “play a crucial role in the proper functioning of the market, especially with the end of the Arenh”.
“The French State in its response to Brussels will plead for the TRV to be maintained as it is,” estimates François Carlier, who is following this issue closely for the consumer association CLCV.
He underlines the “political risk” that a removal of these protective tariffs would entail, a little over a year before the 2027 presidential election, and expects a status quo on the part of Europe in this matter.
