Brussels, 12 June 2012
State aid: Commission gives conditional approval to aid component in regulated electricity tariffs in France
The European Commission has approved the State aid contained in regulated electricity tariffs for large and medium-sized energy consumers in France, subject to compliance with certain conditions relating to the reform of the French electricity market, an annual review of the standard tariffs, and, subsequently, their disappearance at the end of 2015. The tariffs in question are the “green” and “yellow” regulated standard tariffs for companies and the “TARTAM” tariffs (transitional market adjustment tariffs) that applied under the system in place between 2006 and 2011, now repealed. The Commission takes the view that the tariffs are compatible with the EU State aid rules in view of the fact that they will help to limit the power of the incumbent operator over a transitional period.
On completion of an in-depth investigation opened in June 2007 (see IP/07/815), the Commission concluded that the aid contained in these tariffs was compatible with the internal market on certain conditions, the main ones being:
(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.
The Commission concluded that, managed in this way, the tariffs were compatible with the internal market because, given EDF's leading position on the French energy market, the aid that was provided through regulated tariffs could play a transitional role in limiting the market power of the incumbent operator. The ARENH ceiling represents approximately 25% of EDF’s nuclear power generation. The gradual rise in the tariffs based on underlying supply costs, leading to the elimination of regulated tariffs, together with the sourcing opportunities for alternative suppliers under the ARENH arrangements, should promote real competition and give businesses a real choice. The “blue tariffs” for households and small businesses did not fall within the scope of this investigation and so are not covered by the decision.
The Commission opened an in-depth investigation on 13 June 2007, as it considered that the regulated tariffs for large and medium-sized undertakings (with a supply capacity of over 36 kilovolt amperes) could be giving those undertakings an unjustifiable advantage over their competitors and hence might constitute State aid incompatible with the internal market. The scope of the investigation was extended on 10 March 2009 (see IP/09/376).
Some of the conditions set out in this decision were proposed as commitments by the French authorities during the proceedings (see MEMO/09/394) and are now laid down in Law No 2010/1488 on the new organisation of the electricity market (“NOME Law”).
The Commission had also opened a case against France concerning the regulated tariffs for undertakings on the grounds that they might infringe Directive 2003/54/EC on the internal market in electricity (see IP/06/1768). That investigation was closed in January 2012, while the present decision closes the investigation on State aid.
The non-confidential version of the decision will be made available under the case number C17/2007 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New state aid decisions published on the internet and in the Official Journal are listed in the State Aid Weekly e-News.