Electricity: Prices will Increase by 5.9% on June 1st

Electricity prices will rise 5.9% on June 1st

The increase of 5.9% for electricity was proposed by the Energy Regulatory Commission (CRE) in February, but the government has postponed this increase of three months, the maximum delay

Regulated electricity tariffs are to increase by 5.9% as of 1 June, according to a government document consulted by AFP on Wednesday.

The government submitted Tuesday to the Higher Energy Council (CSE) a draft decision on regulated sales tariffs (TRV) sold by EDF to about 25 million homes currently. They must increase “from 1 June 2019,” says the text, unveiled by the specialized letter Enerpresse and which AFP obtained a copy. This date was also confirmed Thursday by a government source.

Increase in fuel prices

The 5.9% increase was proposed by the French Energy Regulatory Commission (CRE) in February . The 1st June is “the deadline allowed by the deliberation of the CRE” for its application, explains the document submitted to the CSE. “In 2018, wholesale electricity prices have increased significantly in France, as in all of Europe, because of the increase in fuel and carbon prices,” says the government.

EDF’s competitors have access to a fixed cost for some of the nuclear electricity produced by EDF, but only to a certain extent. Beyond this quota, they must go to the markets, where prices are high. However, TRVs are also designed to allow these alternative suppliers to be competitive and to offer lower rates: this is the principle of “contestability”.

A postponed increase of three months

“The increase proposed by the CRE is of the same order of magnitude as the increases reported in other countries: 8% in Spain and Italy and 20% increase in the social tariff in Belgium,” further emphasizes the government.

In the midst of the crisis of “yellow vests” , initially fueled by claims on purchasing power , the government had used this winter the statutory period of three months it has to decide on the decision of the CRE. In doing so, it delayed its application during the coldest period, when electricity is used most by individuals.

TRVs are offered by EDF, the historic player in the sector, as well as by local distribution companies in certain regions. Many offers from alternative suppliers are also indexed on these regulated tariffs.

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