September 2023, the Minister of the Economy Bruno Le Maire announces the gradual end of the tariff shield on electricity prices. This tool designed by the government to curb the effects of inflation. And as expected, this gradual extinction of the measure results in a further increase in electricity prices. Plus 10% from February 1st.
The French should therefore expect to see their electricity bill increase by around 130 euros per year. Like a feeling of déjà vu for households. In total, electricity increased by 26.5% over the year 2023, with a first increase of 15% in February, followed by a second of 10% in August.
But behind this next increase lies the reintegration of the TICFE (domestic final consumption tax on electricity). Under the effect of the tariff shield, this tax had been considerably reduced. Initially 32 euros per megawatt hour (MWh), the government lowered it to 1 euro. The minimum provided for by European regulations.
A cost estimated at 9 billion euros per year
If the tariff shield had the advantage of preserving the purchasing power of the French by a few hundred euros per month, the shortfall for public finances is far from insignificant. 9 billion euros less each year in state coffers. And the Minister of the Economy Bruno Le Maire has sounded the alarm more than once on the urgency of putting an end to it. Even more so at a time when France “is close to the euro”.
Thus, as if to pass the pill, Bercy continues to emphasize the progressive nature of the extinction of the shield. And implicitly, the rise in the price of the tax. The TICFE will therefore not return to its former level from February 1st.
“It seems more reasonable to me to gradually increase taxation on electricity from 1 to 15 euros per MWh, therefore, initially, without exceeding a 10% increase in prices, in accordance with the commitment we have made” , Minister of Public Accounts Thomas Cazenave told senators in mid-December.
TICFE, sole and exclusive responsible
The fact remains that according to the latest figures from the Energy Regulatory Commission (CRE), the increase for individuals would have been “zero” without the increase in the price of TICFE. And this, “even including current tax levels”, specifies Emmanuelle Wargon, president of the CRE and former Secretary of State for Ecology (2018-2020) to our colleagues at Parisian.
While conceding that by reducing “this TICFE to 70% of its normal level, to €22.54 per MWh, we arrive at an increase of 10% for individuals, and 6.20% for average professionals” . The executive, which committed that the increase would not go beyond 10%, therefore kept its word.