France’s competition authority urges end of regulated electricity prices

IT SAID IT WOULD ENCOURAGE MORE COMPETITION IN THE SECTOR The French government should scrap regulated electricity tariffs to boost competition, France’s Competition Authority recommended on

Tuesday, November 19.  Some 59% of households and 39% of small non-residential consumers are on the regulated tariffs, provided by utility EDF, the authority said. It recommended the

removal of regulated electricity tariffs be prepared in a “concrete manner” as they are an “obstacle” to free competition and its potential benefits, “in terms of price, innovation and

investment”.  Regulatory tariffs were removed from gas in 2023, but the Conseil d’Etat ruled at the time that regulated electricity tariffs could remain in place because they were in the

“general interest”.  Read more: End of regulated gas prices in France – how to find the best deal WHAT ARE REGULATED TARIFFS? Regulatory tariffs are calculated by taking into account the

previous two years. This means that during the energy crisis, they were lower than market offers, but now, are significantly higher.  The price is set by the government and the energy

regulator. Prices are due to fall by around 9% in February 2025, reflecting the decrease in wholesale energy prices.  Many customers switched to regulated tariffs during the energy crisis,

when wholesale energy prices soared.  But as wholesale prices have fallen, more customers have switched back to market offers.  OPPOSING RECOMMENDATION  The assessment comes the same day

that the Electricity Regulatory Commission recommended that regulated electricity prices be kept for the next five years as they are a “useful benchmark” for consumers. HOW MIGHT IT AFFECT

CUSTOMERS? With 59% of French households on regulated electricity tariffs, many people would have to change to a market-based tariff if the government did decide to scrap regulated prices. 

However, no decision will be taken immediately. The French government is due to present a report to the EU by the end of the year on its retail power market regulation, which could shed some

light on if it is planning to take the Competition Authority’s recommendation on board.