Five-year state aid probe into French electricity tariffs ends

After a five-year in-depth investigation, the European Commission has concluded that the state aid in French electricity tariffs is permissible. The regulated tariffs–green, yellow, and TARTAM (transitional market adjustment) tariffs–are for large and medium energy consumers in France. The Commission found that the tariffs will help limit the power of EDF, the incumbent operator, during the transitional period until the tariffs disappear in 2015.

However, the Commission has conditioned its approval on compliance with the following requirements:

(i) the introduction of regulated access for competitors to nuclear power from EDF’s existing nuclear power stations (the “ARENH” scheme) up to a ceiling of 100 terawatt hours,

(ii) maintenance of the ARENH price at its current level of EUR 42 per MWh pending Commission approval of a methodology to be proposed by France for setting the price, and

(iii) a gradual shift to cost-based pricing every year after summer 2012 until the “green” and “yellow” standard prices are completely eliminated at the end of 2015.

Full content: EC Press Release

Related content: Industry Restructuring, Mergers, and Efficiency: Evidence from Electric Power

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