The Autorité de la concurrence has called (19 November) on the French government to begin practical preparations to phase out regulated electricity tariffs (TRVs) and pursue their objectives through alternative measures. In its report to the Ministers for Energy and the Economy, the Autorité emphasized that while TRVs currently support consumer protection and market stability, they hinder competition and do not fully align with European Union directives.
Background and Current Role of TRVs
Regulated electricity tariffs are used by 59% of individual consumers and 35% of small non-household consumers in France. Managed jointly by the French energy regulator (CRE) and the government, TRVs have historically shielded consumers from wholesale market price volatility. However, they are neither low nor fixed prices and have not prevented government interventions in retail pricing.
The Autorité’s assessment finds that TRVs obscure price signals needed to incentivize energy conservation and restrict competition by favoring the former monopoly supplier EDF. Competing providers face barriers to expanding their market share, limiting innovation and consumer choice.
Recommendations for Abolishing TRVs
Given these challenges and the impending end of regulated access to historical nuclear energy on December 31, 2025, the Autorité recommends abolishing TRVs while safeguarding their public policy goals through targeted measures. Key proposals include:
- Consumer Protection: Establish a robust framework, such as designating one or more suppliers of last resort, to ensure continuous energy access.
- Regional Cohesion: Address barriers to competition in areas served by local electricity distribution companies (ELDs) and in non-interconnected zones (ZNIs).
- Enhanced Market Transparency: Expand and promote the French energy ombudsman’s comparison tool, potentially using it to develop benchmark indices.
- Innovative Offers: Introduce conditional authorisation for offers with termination indemnities to encourage long-term pricing stability.
Maintaining TRVs: A Contingency Plan
Should TRVs remain, the Autorité suggests measures to reduce their impact on competition. These include:
- Allowing all suppliers to offer TRVs, not just EDF.
- Mandating clearer separation between EDF’s TRV and commercial activities.
- Reevaluating price signals to align TRVs with ecological transition goals.
Aligning with EU Law and Crisis Preparedness
The Autorité’s report highlights the European Union’s directive that regulated retail prices should be transitional and targeted at vulnerable consumers. It also acknowledges the possibility of reinstating TRVs temporarily during severe energy crises, aligning with EU allowances for emergency interventions.
Looking Ahead
As France’s electricity market evolves, the Autorité stresses the need for proactive and thoughtful reforms to foster competition while safeguarding consumer interests. Whether TRVs are abolished or restructured, the goal remains clear: a competitive, transparent, and resilient electricity market for all.
