Francia : April 12, 2010
The French Government is currently contemplating whether to extend through the reminder of 2010 its below market rate program which, since its inception, has cost Électricité de France (“EDF”) billions of euros. The program, known as TaRTAM, was implemented by the Government in 2007 by providing industrial customers who purchase deregulated supply a financial hedge against higher market-based electricity charges. While the program has been a blessing to industrial customers, EDF has borne the brunt of its cost by forcing the electricity giant to pay rival power suppliers the cost between the regulated and market-based rates.
The extension of TaRTAM, which was to conclude this coming June, is to be debated by the French Parliament next month. The extension of TaRTAM through 2010 would be part of a massive overhaul of the French electricity market wherein the so-called Nome Law would start to take effect in 2011 gradually doing away with regulated tariffs by forcing commercial and industrial customers into the liberalized market.
A draft of the Nome Law calls for EDF competitors to make investments in generation rather than simply purchasing all of their requirements through EDF and reselling it back to the public. The Nome Law would also force all commercial and industrial customers to vacate regulated tariff offerings by no later than the end of 2015. By having all of its domestic commercial/industrial base purchasing electricity in the liberalized market, France will fall in line with EU directives calling for a competitive electricity market throughout the Union. French households, however, will still be able to purchase their electricity through regulated EDF tariff offerings past 2015.
While EDF has benefitted over the years from its dominance in the French electricity market, it certainly has no desire to extend TaRTAM. Through the first six months of this year alone, EDF budgeted 2 billion euros for TaRTAM. Any extension of the program this year will certainly have the effect of costing EDF a similar amount of money thereby impairing its position among investors.
French consumers currently enjoy some of the lowest electricity rates on the entire Continent. According to NUS Consulting’s 2009 Electricity Survey, industrial customers in France paid approximately 8.1 cents /kWh (USD) while similar industrial customers in Italy paid well over 16 cents/kWh. Prices in neighboring Germany and Spain were 13.5 cents/kWh and 12.5 cents/kWh, respectively. The only surveyed European countries with lower electricity prices than France were Nordic countries Finland and Sweden who benefit from low cost hydro-based generation facilities.