French minister resists EDF calls for tariff hike

PARIS, July 15 (Reuters) - The potential for French electricity tariffs to rise will hinge on energy production costs rather than the corporate strategy of power giant EDF, Economy Minister Christine Lagarde said on Wednesday.

The head of EDF (EDF.PA), Pierre Gadonneix, has expressed hopes for a rise in state-controlled electricity tariffs and warned that his company might have to slash investment if a 20-percent rise did not materialise over the next three years.

Lagarde, who has ignored such calls from the EDF chief in the past, told a session of parliament that the government had yet to reach any conclusions, but that the criteria for making decisions was clear.

"The tariffs will only be raised in accordance with higher costs for producing our electricity in France," she said.

"Whatever EDF's development strategy and its international strategy in particular, any tariff rises in France concerning electricity consumed by the French will be based on costs associated with electricity in France," she said.

Lagarde has said previously that any price hikes would need to take into account the fragile situation of many households and businesses in the current downturn and that they would not rise "too rapidly".

Speaking to Reuters on Wednesday, Gadonneix made renewed calls for electricity rates to head higher.

"We have increased investment in France without a rise in income," he said on the sidelines of an event.

"Therefore, it is entirely financed by debt and it is clear that we cannot do that for long," he said. (Reporting by Elizabeth Pineau and Emmanuel Jarry; editing by Elaine Hardcastle )