French firm suspected of reselling state electricity for higher price

A French electricity supplier is being investigated over suggestions that it is encouraging its customers to go elsewhere so that it can resell its supply at a higher price.

Read more: Why some French electricity firms are urging customers to go to EDF

Ohm Énergie, an alternative supplier whose rates are not tied to the capped regulated electricity tariff, sent a message to its customers last month telling them that their bills were about to increase more than twofold.

“I had an email from Ohm Énergie telling me that my monthly rate would increase and that instead of paying €147 per month I would pay €330.

“They simply encouraged me to change supplier, and to come back to them in March,” one customer said.

This sudden rise in prices does indeed lead many people to look for a better offer elsewhere, which could be what Ohm was hoping for.

Read also: Can I change my French electricity supplier for a cheaper alternative?

It is in electricity suppliers’ interest to have as many customers as possible in the summer, and to cut down their numbers in the autumn.

They will offer attractive rates in the spring and early summer, so that they can access a greater proportion of Arenh (accès régulé à l’électricité nucléaire historique) the mechanism which generally enables firms to buy up to 100TWh between them at €42 per MWh from EDF.

Beyond this, any additional supply must be bought on the open market, where prices have reached €700 per MWh this year.

In 2022, electricity firms have been able to buy 120TWh at €46 from EDF to help them cope with soaring market prices.

The share of Arenh electricity allocated to each supplier is calculated at low-demand times such as the weekend, public holidays and over the summer, so it makes sense to have a lot of customers over July and August.

However, if they let a lot of these consumers go at the end of the summer, they may have surplus supplies of their Arenh electricity, which they can then resell on the open market for much higher prices.

Having bought this electricity at just above €40 per MWh, they can obtain €600 for it at market prices.

Ohm has denied that it has engaged in such practices, its founder and president François Joubert says that the company has “never resold a single kWh of Arenh electricity on the open market.

The supplier has also said that its “tariffs remain lower or equal to its competitors after having been increased,” and that it “plans to keep them level for the whole winter, without further rises.”

Ohm is refusing to comment on the investigation, which is being carried out by the Commission de régulation de l’énergie.

If it is found to have got rid of customers so that it could resell its electricity supply, it could face a fine of 8% of its turnover and be banned from operating for a year.

It was consumer group CLCV which first alerted authorities to a potential abuse of the Arenh mechanism by alternative suppliers earlier this year, saying that it also suspects Mint Energie, against which it has initiated legal action.

Read more: Consumers sue over French energy contract switch to higher tariff

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