Electricity market: UFC-Que Choisir denounces a carpet merchants' agreement negotiated in the shadows

The association therefore denounces today's government announcements which pose an unjustified inflationary risk on household electricity bills, demands that the new nuclear tariff be duly objective, and will in any case act by all means to ensure consumers benefit from competitive electricity prices.

A new regulation scandalously negotiated in the shadows

More than 2 years ago, and faced with an organization of the electricity market running out of steam, the UFC-Que Choisir called for its complete reform and formulated concrete proposals likely to ensure consumers benefit from competitive prices. linked not to the explosive prices of electricity on international markets, but to the costs of electricity production in France (1). The association then called for “the establishment of a public debate on the future of this regulation, on the basis of transparency on the costs actually borne by EDF to produce its electricity from nuclear origin”.

With several consumer associations, UFC-Que Choisir subsequently reiterated this request to the government on numerous occasions. While he indicated to them, more recently, that consumer representatives would be fully involved in discussions around new regulation of the electricity market, he was in reality acting in the shadows to find an agreement with EDF. While consumers are the main interested parties in the organization having a direct impact on their bills, it is unacceptable that the government wants to impose a new one on them, especially since the government is judge and party, since EDF is now a 100% public company.

A 66% increase in the nuclear price, without any objectification

The target price of 70 €/MWh for nuclear production announced today looks like the result of a pathetic negotiation of carpetbaggers. If, depending on fluctuating parameters, the Energy Regulatory Commission (CRE) – in often confidential reports fortunately made known to the general public via leaks to the press – sometimes estimated this price at around €50/MWh, sometimes around €60/MWh, EDF initially demanded a rate closer to €100/MWh, then €75/MWh. The government has no problem today indicating that the price chosen is lower than EDF's request. How is the price of €70/MWh (which still corresponds to an increase of 66% compared to the current regulated price of nuclear power) based on the costs actually borne by EDF to produce electricity? In nothing.

Does this price include consumer participation in EDF's future investments in nuclear power? If so, what amount, on the basis of what assumptions, and with what guarantees that the electrician will not cause the construction deadlines and costs of new power plants to slip, as is currently the case for the Flamanville EPR? So many questions that should have been answered before setting the price of nuclear power, involving not only consumer organizations but also parliamentarians, representatives of citizens. This failure in public decision-making once again reflects a gaping flaw in the organization of our institutions.

For the future of the electricity market, the government is building a gas plant!

Beyond the price of nuclear power obtained by EDF, the overall operation of the new market regulation promoted by the government resembles a gas factory. Although the maintenance of the regulated sales tariff has been announced, its calculation rules still remain secret today, and there is no guarantee that it will be a tariff representative of the costs of producing electricity in France, especially since the nuclear price of €70/MWh would not be fixed and imposed on EDF, but would be a simple objective assigned to the historic supplier.

In reality, it is largely through a system of ex-post redistribution of profits generated by EDF linked to the sale of its nuclear electricity on international markets that consumers could benefit from a tariff uncorrelated with market prices. But would all consumers benefit from this redistribution? Nothing is less certain, and there is today a real risk that such a redistribution will be unequal and that many households who are today strongly affected by inflation will not benefit from the nuclear pension.

In view of these findings, the UFC-Que Choisir:

• Asks the government to immediately make public all the economic elements leading to setting the price of nuclear power at €70/MWh;
• Requests in any case that this tariff be set on the basis of a methodology discussed transparently with all stakeholders, as well as the general framework of the new regulation;
• Calls on parliamentarians to act during parliamentary discussions on the new electricity regulation to assure consumers that they will all be able to benefit from prices that are truly representative of the costs of electricity production in France.

Illustrative image of the article via Depositphotos.com.