French power bills must rise to cover green costs: CRE

Reuters News
Posted: Dec 18, 2012 2:04 PM

PARIS (Reuters) - A tax paid by French consumers as part of their electricity bills would have to rise 80 percent to cover development of renewable energy, energy regulator CRE said on Tuesday.

Renewable energy, which makes up 13 percent of the French energy mix, costs more than traditional sources including nuclear whose use France wants to limit.

The CSPE tax makes up around 8 percent of electricity bills paid by consumers, which is not enough to finance the legally binding purchase of subsidized green energy by electricity suppliers, leading to a deficit.

The CSPE deficit has emerged because the tax has not risen enough to compensate for spending on green energy production, resulting in a gap forecast at around 5 billion euros ($6.6 billion) for EDF, Europe's biggest electricity supplier, at the end of 2012.

A source at the energy ministry said last month the government was seeking a short-term solution to the CSPE deficit and a structural reform would be discussed during a debate on energy to be concluded next year.

One way to achieve a positive outcome on CSPE for EDF would be for the government to widen the base of the tax to gas and oil companies such as GDF Suez and Total, as EDF chief executive Henri Proglio has suggested.

The CRE said in a note posted on its website that if a decree to push up the tax was not issued by the year-end, it would automatically rise 3 euros per megawatt per hour (MWh) to 13.5 euros.

The regulator said the tax would need to rise to 18.8 euros to cover costs, with support to the solar sector making up 5.5 euros. ($1 = 0.7568 euros)

(Reporting By Benjamin Mallet; Editing by Dan Lalor)