Bloomberg News

French Gas Suppliers Take Government to Court Over Rates

October 24, 2012

French natural-gas suppliers are taking the government to court over its decision to cap an increase in regulated rates at 2 percent, a year after they won a legal victory against the previous administration.

“The government has decided to continue to politicize the setting of gas rates,” the group known as Anode, which represents competitors to the former GDF Suez (GSZ) SA monopoly, said today in a statement.

GDF Suez, which is 35 percent owned by the state, was allowed to raise gas prices for households by 2 percent from October, less than it had requested. The government said at the time its decision was based on the need to safeguard the interests of consumers.

France’s regulator has ruled the latest increase should have been 6.1 percent for households in order for distributors to cover their costs of supply.

“The opening of the market is seriously threatened,” according to Anode, which includes companies such as Direct Energie. The financial health of the distributors is at risk and the fact the increase comes at the start of winter adds impetus to their case, it said.

Regulated rates that are too low are an entry barrier to alternative suppliers to the market and a “lack of visibility” on rates won’t encourage new market participants, the regulator said last month.

Anode and GDF Suez took the former government to court last year after being prevented from passing on supply costs to consumers. The court ruled in favor of Anode and the utility.

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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