EDF attacks a decision taken by… the State

EDF attacks a decision taken by… the State

An appeal by a state-owned company against a decision taken by… the state. The scenario is not trivial. It is the showdown that EDF engages with its main shareholder (84% of the capital). While the latter intends to oblige it, as announced in January and formalized by decree on March 11, to sell more electricity at low prices to its competitors in order to limit the increase in tariffs, the incumbent supplier does not intend to let To do. And is indeed combative in the face of a measure that its CEO, Jean-Bernard Lévy, had immediately described as “ real shock in a letter to managers.

And for good reason, he announced this Thursday, May 12, on the occasion of the Group’s General Meeting of Shareholders, his intention to initiate a ” equitable relief Against the device, to which the State has two months to respond.

As indicated in its press release of January 13, 2022, EDF will take all measures likely to preserve its rights which it deems useful in relation to the decree of March 11, 2022 mentioned as well as with the three decrees which supplement the mechanism in question. In this context, EDF addressed to the State, under conditions of deadlines preserving its rights, a non-contentious appeal requesting the withdrawal of these four acts. In any case, EDF reserves the possibility of seizing the competent administrative courts”, specifies the company.

In fact, this measure, which requires it to increase by 20% the production of 100 terawatt hours (TWh) sold within the framework of Regulated Access to Historic Nuclear Electricity (ARENH), should “cost” it dearly: 10 billion euros of shortfall over the year, according to my latest EDF estimates presented in early May.

And this, even though the company is facing a corrosion defect identified in several of the reactors in the fleet, which forces it to close some of them and drastically lower its production for 2022. where the company must invest tens of billions to extend existing power plants and prepare for the construction of new EPRs.

Electricity prices: “After having fought it”, EDF saw the State’s decision “as a real shock”, says its CEO Jean-Bernard Lévy

A rejection of the unions’ request by the Council of State

Following the publication of the decree, the CGT, CFE-CGC, CFDT and FO federations in the energy sector, dthe members of the Board of Directors and representatives of employee shareholders themselves had asked the emergency suspension ofs regulatory texts organizing what they consider to be a spoliation of EDF “. But last Friday, the judge in chambers of the Council of State had decided to maintain the device, affirming that neither the investigation nor the hearing demonstrated that this measure created an emergency situation for EDF’s financial interests, the employment conditions of its employees or the financial interests of its employee shareholders “.

“The Council of State rejected the request considering that there was no urgency to suspend this decision, but rather the need to maintain it while waiting to decide on the merits”, reacted Monday the CFE Energies.

The fact remains that, in its opinion, the Council of State considered that the measure presents a ” public interest “. ” In a context of sharp price increases, the increase in Arenh’s volume should make it possible to significantly limit the increase in electricity prices “, according to the judge.

A necessary device according to the government

For its part, the executive had accused EDF of loading the boat with its losses, assuring that the sale of the additional 20 TW of ARENH to its competitors would not in itself cost the public company ” only around 3 billion euros “. The other 7 billion euros missing from EDF’s Ebitda would therefore be due to the slightest tariff increase resulting from government action.

Is it a public service, to help the French, or a company whose sole purpose is profit? I opt for the first answer “, added on January 25 the Minister of the Economy, Bruno Le Maire, at the microphone of FranceInfo.

An argument shared by Jean-François Carenco, president of the Energy Regulatory Commission (CRE). Indeed, the senior civil servant had come to the aid of the government, by affirming at the end of January that the drop in EDF’s Ebitda was not “ not desirable but essential “, because without state intervention, the regulated tariff would have jumped to 44.5% for individuals on February 1, instead of 4%.

“What matters are the consumers, industrial and domestic. How can we make fun of consumers? Yes the Ebitda, the margin, fell by 8 or 9 billion. […] Except that they will return a little below what they had planned in 2020 for 2022. It is not true that we are looting EDF, they will just have less to gain. […] Can EDF say: “I could have won 8 billion”, and meanwhile companies are closing? It is not possible. EDF is not threatened with closure, ”he stormed at the microphone of FranceInfo.

What will the real impact of raising the ARENH ceiling be on consumers?