The Government implements the 4% blocking of the increase in regulated electricity prices

In its deliberation of January 18, the Energy Regulatory Commission, an independent administrative authority, proposed to the government regulated sales tariffs which, in accordance with the law, reflect the supply costs without additional measures. The tariff proposals would lead to a very sharp increase:

• +44,5% excluding tax, i.e. +35,4% including tax, for blue tariffs applicable to residential consumers;
• + 44,7% excluding tax, i.e. + 35,9% including tax, for the blue tariffs applicable to eligible professional consumers.

This increase is mainly explained by the surge in prices on the European electricity market, itself linked in particular to the sharp rise in gas prices in Europe induced by the economic recovery and amplified by the low level of deliveries of Russian gas.

The Government had anticipated this upward movement and made several provisions to limit its effects:

• The level of the tax on electricity (TICFE) is reduced by 95% for 1 year to its possible minimum provided for by European law, i.e. €1/MWh for residential and similar customers and €0,5/MWh for others. This reduction, applicable from February 1, represents a budgetary cost for the State of 8 billion euros. This tax measure reduces the increase in regulated tariffs to 20,04% including tax for residential consumers and 20,88% including tax for professional consumers.
• Exceptionally and temporarily in 2022, the volume of ARENH delivered in 2022 will increase by 20 TWh, so that all consumers benefit from the competitiveness of the French nuclear power plant. This volume of electricity at a regulated rate will benefit all consumers, individuals, local authorities and professionals. Suppliers will fully pass on this measure to the benefit of consumers, under the supervision of the Energy Regulatory Commission.
• Finally, the finance law authorizes the Government to oppose the tariff proposals of the Energy Regulatory Commission on an exceptional basis in 2022 and to limit the increase to 4%. The orders published today implement this cap, which applies to residential consumers and small professional consumers in mainland France and to all consumers in non-interconnected areas (Corsica and overseas territories).

This cap reduces the average increase in household electricity bills to €38/year on the bill of a residential customer and around €60/year for a professional customer. In the absence of measures, the increase would have been €330/year for a residential customer and €540/year for a professional customer.

The tariff shield benefits all French people regardless of their supplier. The finance law provides that all suppliers benefit from compensation in 2022 by the State for the costs that the price cap induces for them, up to the amount of the effect of the cap applied to the regulated tariffs. They will thus be able to implement this cap and allow all their customers to benefit from it.

These measures are part of a set of actions taken by the Government for several months to mitigate the consequences of the rise in energy prices for consumers, and in particular the most modest:

• An exceptional energy check of €100 was distributed during the month of December 2021. This new check helps the 5,8 million households who had already received an energy check in April 2021 to pay their energy bills. This support targeted at the most modest households represents aid of nearly 600 million euros. A new energy check will be sent in April 2022.
• Regulated gas prices have been frozen at their October 2021 level for the entire duration of the winter and if necessary until the end of 2022. The State will bear the additional cost induced by this freeze for suppliers, in accordance with the provisions set out in the finance law for 2022.
• An inflation allowance, in the amount of €100, is allocated to the 38 million people residing in France whose net monthly income is less than €2, between December 000 and February 2021, i.e. additional support from the State of 2022 billion euros. The aid is paid in one go by the employers to the employees, the latter being fully compensated by the State for these payments via aid for the payment of their social charges.
• Finally, given the continuous rise in fuel prices, the Prime Minister announced on January 25, 2022 a 10% increase in the scale of mileage allowances. Around 2,5 million households are affected by this measure, the effect of which will be quick and direct as soon as they file their tax return on income for 2021 or on profits for the past year. This increase is also intended to serve as a reference, and therefore potentially to affect the mileage allowances paid directly by employers to their employees who use their personal vehicle.

The Government is thus acting to protect the purchasing power of the French people and the competitiveness of the economy in the face of rising energy prices.