* State Council to rule on regulated gas tariffs soon
* Small vendors say tariffs are anti-competitive
* ANODE lobby hopes for end to power tariffs too
By Benjamin Mallet
PARIS, May 23 Smaller competitors of power
utility EDF and gas utility Engie hope that France's top court
will soon abolish regulated gas tariffs as a first step towards
ending them altogether.
Nearly a decade after French gas and power markets were
opened to competition, ex-monopolists EDF and Engie
retain retail market shares of 86 and 77 percent
respectively, with 27.5 million clients for EDF and 8.2 million
The big two are the only power vendors that offer
government-regulated tariffs, while smaller or foreign players
such as Direct Energie and Italy's Eni try
to win customers by offering more market-based rates.
They complain that the regulated tariffs make it more
difficult for them to win market share. Britain, Germany and
most other European Union countries have long scrapped regulated
The ANODE association of alternative power and gas vendors
filed a legal challenge against regulated gas tariffs with
France's Conseil d'Etat in 2013. The council then sought the
advice of the European Court of Justice, which in September 2016
ruled that regulated tariffs are by nature an obstacle to a
competitive market in natural gas.
But the EU court also said that EU member states can assess
whether, in the general economic interest, regulated tariffs can
be imposed to ensure security of supply and territorial
cohesion. The State Council, France's highest administrative
court, is expected to issue a ruling in coming weeks or months.
A Conseil d'Etat spokesman declined to comment on the case
and would not say when the court will pronounce itself.
"The end of regulated tariffs would boost competition in the
retail sector, as it has done for the industrial and municipal
sectors," Direct Energie CEO Fabien Chone told Reuters.
Chone, also head of ANODE, said scrapping regulated tariffs
would bring lower prices and more innovation and said he hoped
new President Emmanuel Macron would see that as a way to boost
France's productivity and competitiveness.
Regulated tariffs still accounted for 88 percent of power
consumption and 53 percent of gas consumption in France last
year. Engie also has clients on market prices, although it has
come under fire from competitors for using its customer database
of regulated tariff clients to offer market-based packages.
ANODE hopes that a ruling against gas tariffs will encourage
the new French government to also consider scrapping regulated
That could meet more resistance, as Engie imports all its
gas and is less than one third state-owned, while EDF is 83
percent state-owned and produces three quarters of its power in
nuclear plants seen as key to France's energy independence.
"We do not expect a brutal end to regulated tariffs," said
Engie retail chief Pierre Mongin, adding that an overhaul of
power tariffs should be discussed in parliament.
"But if regulated gas tariffs are scrapped, electricity
tariffs should be too, as there can be no distortion between the
two energy," he said.
EDF declined to comment. Its CEO, Jean-Bernard Levy, told
the French daily Les Echos in March that "our central scenario
is that nothing will change".
(Reporting by Benjamin Mallet; writing by Geert De Clercq;
editing by Mark Heinrich)