Millions of French homes escape August electricity price rise
A scheduled increase has been paused, the government has confirmed
The rise would have led to a 1% increase in the average annual household bill
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More than 22 million households and businesses in France will not see their electricity bills rise next month contrary to previous expectations after the government paused plans to increase energy tariffs.
Electricity prices had been set to rise from August 1, due to a planned 4.8% rise in grid fees (le tarif d'utilisation des réseaux publics de distribution d'électricité, TURPE).
This would have equated to bills rising by an average of 1% per household, so a rise of €12 for an annual bill of €1,200, for example.
The energy regulator la Commission de régulation de l'énergie (CRE) had previously confirmed the planned increase, and said it was due to a rise in the grid fee.
However, Junior Minister for Industry Roland Lescure has now decided to pause the increase, and “not to publish” the decree in the Journal Officiel (for now). He said: “We want to ensure stability and visibility for consumers.”
The government now has two months "in which to request new deliberations on changes" to the TURPE fee, the CRE said.
What is the ‘TURPE’?
The TURPE accounts for around a third of the final electricity bill. It pays for the delivery of energy to users via the grid, and is paid by electricity suppliers to the producer (RTE) and distributor (Enedis).
Alternative suppliers (competitors to EDF), are free to decide whether or not to apply any increase to the TURPE, but they almost always choose to do so.
‘Avoid changes that stop consumers planning annual bills’
The 1% increase that would have occurred if the rise had gone ahead is much lower than the 11.7% rise in the ‘benchmark gas price’ in July, but it does come after a volatile period for energy costs, which peaked (so far) in 2021-2022 due to the Ukraine war and post-Covid recovery.
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By pausing the increase, the government is avoiding further price rises, after those seen when the country transitioned away from the bouclier tarifaire sur l'énergie (energy price shield), which had previously capped prices to help households manage the spiralling costs.
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Earlier this year, Economy Minister Bruno Le Maire pledged not to increase bills for the rest of 2024, and has even announced that electricity bills are expected to fall by 10-15% by February 2025, due to an anticipated drop in prices on the wholesale market.
The paused tariff change is now likely to be introduced from February 1, 2025. Alongside the predicted 10-15% fall, this 1% increase is expected to make little difference to energy bills overall.
The CRE is expected to give its views on this hypothesis in September.
Meanwhile, Mr Lescure has said: “I want to avoid ad hoc changes that prevent consumers from planning their annual bills.
“Regardless of politics, the Ministry of Energy and the CRE need to work closely together to improve visibility for consumers and to avoid worrying and harmful misleading effects,” he said.
