Electricity bills at risk of steep rises, claims french consumer association

BILLS COULD RISE BY AS MUCH AS 20% NEXT YEAR, THE ASSOCIATION HAS SAID Electricity bills in France are at risk of rising by almost 20% for some customers in 2026, a French consumer

association has warned, due to a revised method of calculating tariffs. It comes after bills fell by 15% on average on February 1 this year. In a new study, UFC-Que Choisir has said that

consumers whose bills are indexed to the regulated electricity tariff (tarif réglementé de l'électricité, TRVE) could experience supply cost increases of up to 44%, and bill rises of up

to 20%, due to new nuclear regulation. Read also: Confirmed: Electricity bills to drop by 15% from February for most French households Read more: Electricity bills set to fall by around 10%

for millions of households in France WHY THE PRICE INCREASES? UFC-Que Choisir’s projections come amid a forthcoming change in how tariffs are calculated in France. In late 2023, EDF and the

state agreed on a new mechanism to succeed what is known as ‘Arenh’ (accès régulé à l'électricité nucléaire historique, regulated access to historical nuclear electricity).  Arenh

forced suppliers to sell around a quarter of their nuclear electricity at the cut-price cost of €42 per megawatt hour (MWh) to industrial electricity consumers, and also to alternative

suppliers.  This benefited the consumer, but the system has long been criticised by EDF. Arenh expires on December 31 this year after having been in operation for 15 years. Under the new

agreement which comes into force from January 1, 2026, the electricity price is to be set at around €70 per MWh on average. EDF will also be able to sell all of its electricity on the

markets, rather than reserve some of it for provision at a lower price as previously required.  However, the agreement also stipulates that EDF must allocate part of its extra income to a

‘redistribution mechanism’ for all consumers. For electricity prices of between €78-110 per MWh, 50% of EDF's additional income would be allocated and 90% above €110 per MWh. Consumer

and industrial representatives have not welcomed the new system, and say that it will lead to sharp fluctuations and increases in consumer electricity prices. RISING SUPPLY COSTS AND BILLS?

  In a bid to evaluate the possible effects of the new system, UFC-Que Choisir has simulated what next year’s bills could look like, using the latest data from the energy regulatory

commission, la Commission de régulation de l'énergie (CRE), on the evolution of regulated tariffs. It found:  * The cost of supply would rise by 44% compared to the current level, from

€81.37 per MWh to more than €117.  * Consumers with a basic tariff will pay on average 19% more, which could equate to an additional €250 per year for an average household, rising to much

more for less energy-efficient homes. * An average household subscribing to the regulated EDF tariff would pay some €1,600 per year instead of €1,374. “This reform imposes a new method of

calculating tariffs, based on the high and unstable prices of the wholesale markets, instead of the real cost of electricity production in France,” UFC-Que Choisir said. “This explosion in

electricity prices is the result of a conscious political choice: to make the French pay full price for their electricity, as if it had to be bought in its entirety on the international

markets, even though it is produced in France at much lower costs,” it added. “Without a change of course, this reform will inevitably lead to a sharp rise in bills for millions of

households.” Read also: Compare, switch, save: Which French electricity contract is best?  CONSUMER REDISTRIBUTION DOUBTS UFC-Que Choisir also questioned the effectiveness of the

‘redistribution mechanism’ provided for in the new plan, and claimed that the redistribution of EDF's profits to households will in reality be very limited.  It said: “In total, on 1

MWh of nuclear production sold on the markets at €120, EDF would pay tax of €28.50, giving it a comfortable margin (profit) of €26.50.” However, “only €17.10 [of the €28.50] would actually

be passed on to consumers” under the new system, UFC-Que Choisir claimed. It said that in practice, around 40% of the extra tax revenue would “supplement the state budget”, rather than

benefiting consumers.  ‘HIGHER TAXES ON PROFITS AND INDEPENDENT COMMISSION’ To address this, the association is calling for a higher tax on EDF's profits and for the full proceeds to be

passed to consumers in the form of a direct reduction in their bills. It has also called for “the immediate establishment of an independent commission, including consumer associations, to

thoroughly rethink the regulation of the electricity market”.  The association also suggests “the creation of a public electricity service” that would guarantee “a price that reflects the

real costs of nuclear and hydroelectric power, and is not dictated by market fluctuations”, it said. SUPPLIERS REJECT CLAIMS For their part, when contacted by FranceInfo in response to the

UFC-Que Choisir report, suppliers denounced the finding as “fantasist”. They said that the new system would actually protect consumers better than Arenh, and pointed out that the Arenh

system had not particularly protected consumers from sharp price rises in 2022, after the start of the war in Ukraine.