Bloomberg News

French Power Prices May Increase in January, Besson Says

November 23, 2011

(Updates with comment on gas prices in fifth paragraph.)

Nov. 23 (Bloomberg) -- French Industry Minister Eric Besson said state-regulated power rates charged by Electricite de France SA may rise in January.

“They will likely increase,” Besson said in an interview on RMC radio. “Any increases have to be extremely limited so as not to weigh on purchasing power.”

The government, facing an election next year, is under pressure to curb energy costs for consumers including regulated power and natural gas rates and gasoline prices. Prime Minister Francois Fillon pushed up power prices on July 1 and said the increase would be limited to 2.9 percent until June 30, 2012.

“The law obliges us to take into account the cost of supply for gas and the cost of production for electricity,” Besson said. “For GDF Suez there is debate about how this cost of supply is calculated.”

GDF Suez SA, operator of Europe’s biggest gas network, has mounted a legal challenge to a government-imposed freeze on gas prices for households. The freeze will remain in place through the April-May presidential elections, Besson said.

The price at which EDF sells wholesale nuclear power to rivals is sufficient to allow the utility to pay for work to improve safety at nuclear reactors, Besson said.

France’s nuclear watchdog is due to announce in January the results of safety audits at the country’s atomic installations.

--Editors: Alex Devine, Tony Barrett

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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