The executive caps regulated electricity prices and reduces taxation as part of the “tariff shield” designed to limit the rise in bills for individuals and businesses, via several texts published on Sunday in the Official Journal.
An announcement by Jean Castex in the face of soaring prices
Faced with the historic spike in gas and electricity prices in Europe in 2021, Prime Minister Jean Castex announced in September that he would limit the increase in regulated electricity prices to 4% on February 1, 2022.
Five decrees published on Sunday contain the increase to 4% including tax “for residential consumers and small professional consumers in mainland France and for all consumers in non-interconnected areas (Corsica and overseas territories)”, underlines a press release from the Ministry of Transition. ecological.
What gain for the French concerned?
The measure “avoids an increase of 35.4% on February 1, 2022”, all taxes included, for individuals, it is added. The Electricity Regulatory Commission (CRE) had calculated that the increase would have been 44.5% excluding taxes for individuals.
At the same time, a decree reduced to a minimum, from February 1 and until the end of January 2023, the main tax on electricity: one euro per megawatt hour for households and 50 cents for businesses. This tax was previously 22.50 euros per megawatt hour.
“This cap reduces the average increase in household electricity bills to 38 euros per year on the bill of a residential customer and around 60 euros per year for a professional customer. In the absence of measures, the increase would have been 330 euros per year for a residential customer and 540 euros per year for a professional customer”, defends the government.
Who will compensate?
The government estimates the cost of this tax cut at eight billion euros, which is however not enough to limit the increase in prices that would have occurred on the basis of the explosion in gas prices.
To go down to the 4% promised, the government asked EDF to increase by 20% the annual quota of electricity sold at a reduced price to its competitors, increasing to 120 terawatt hours (compared to 100 TWh) the ceiling of the Arenh (Regulated access to historical nuclear electricity), the mechanism that forces the energy company to sell its production to its low-cost competitors. This will cost about eight billion euros to EDF.
More than 40% of EDF employees went on strike on Wednesday against this request, the consequences of which they fear for the health of the group.