‘Unfairly high’ electricity prices: EDF pledges to renegotiate some companies’ contracts

EDF has responded to Bruno Le Maire’s call. The group intends to “renegotiate contracts” that were signed with SMEs “at a time when prices were at their highest” during the energy crisis, the energy minister said on Monday. and finance.

“EDF is seeking to renegotiate the VSE, SME and ETI contracts that were signed when prices were at their highest. This is vital for these companies. EDF is implementing this,” said Bruno Le Maire after his participation in the EDF executive committee, a first for a minister since the full nationalization of the group in June 2023.

On Friday, before the federation of bakery companies, the minister assured that he would “place an order” with chief executive Luke Remont “for the company to respond to the need to renegotiate contracts”. Several trade bodies have condemned the companies’ pricing terms, which remain tied to two- or three-year power supply contracts signed in 2022 at the height of rising energy prices, although prices have fallen significantly since then.

The Confederation of French Traders (CDF) earlier on Monday asked the minister to bring together electricity suppliers to review their prices, which are considered “unfairly high”. The confederation, which brings together about twenty organizations of independent traders (florists, clothing stores, markets, booksellers, tobacconists, fairgrounds, etc.), condemned in a press release the prices of electricity “totally disproportionate compared to real market tariffs.” This request follows a request from hoteliers and restaurateurs. The French Hotel and Restaurant Group (GHR) and the Union of Hotel Trade and Industry (UMIH) on February 12 called on Bruno Le Maire to reconsider the prices of his electricity contracts, which are considered “overhead”.

Restart of nuclear power

According to the CDF, which represents more than 450,000 companies and a million employees, energy suppliers are “stubbornly refusing to adjust their prices despite falling energy costs.” Small businesses in city centers will be “forced to bear energy prices of up to €350 per MWh, while the current market price is less than €90 per MWh,” the organization says. The latter recalls “record profits” for electricians in 2023: EDF ended the year with a net profit of 10 billion euros.

According to a survey carried out at the end of January by GHR and UMIH, “more than half of professionals (59%) are still locked into energy supply contracts at extremely high prices, i.e. above €180 per MWh, while the price of MWh has fallen since late 2022 and is less than half that price. “Between 10 and 15% of professionals will be locked into contracts with prices exceeding €350 per MWh,” both unions claim. Electricity prices rose for most French people on February 1, with the end of the “price shield”. For small businesses, the growth ranged from 5.2 to 8%, depending on contracts.

In addition, the Minister of Economy called on the EDF group to mobilize “all necessary human and technical resources” to implement the new nuclear reactor program “within the established costs and time frames.” “We have embarked on the largest industrial project in Europe in decades to build six new nuclear reactors. We want this new major project to be a success,” the minister stressed, in particular to the group’s senior management, according to comments sent by his office.

He recalled the group’s priorities: extending the life of aging power plants and increasing electricity production while pursuing the government’s desired nuclear recovery program with the construction of six new EPR2 reactors and then eight others.