After gas, electricity. The regulated electricity tariff increases this Wednesday, February 1 on average 15% in France for more than 20 million households, one month after a similar increase in the gas tariff, on January 1. Electricity tariffs had been frozen in France since February 1, 2022, when they had increased by 4%, under the “tariff shield” announced in October 2021 by the then government. In total, this rate has increased by 19.6% since 2021.
Without the tariff shield financed by the State, electricity would have had to increase by 99.22% including tax, according to the scale made public last January by the Energy Regulation Commission (CRE) and set according to the costs of supply of electricity on the wholesale markets.
The increase applied from this Wednesday concerns, in France, 20.54 million households and 1.45 million small professionals, as well as Corsica and Overseas. However, it does not concern New Caledonia and Polynesia which have their own rates. “The new prices will be passed on to the bill each month,” EDF told AFP. For customers who do not want to modify their monthly payments, an adjustment at the end of the year will be applied.
Differences depending on the type of contract
This increase of 15% on average concerns customers with an electricity contract at the regulated tariff or a contract whose prices are indexed to the regulated tariffs, as the national energy ombudsman reminds us on its news site. Customers who have a contract with EDF and Engie, incumbent suppliers, are subject to the regulated tariff and are therefore protected against sharp increases in energy prices. “This is also the case of those who had signed energy supply contracts at a fixed price blocked for one year, two years or three years”, raises the energy mediator.
Many alternative operators also offer tariffs that are indexed to the regulated tariff and, in fact, protected by the tariff shield introduced by the government. On the other hand, customers who have a contract indexed to wholesale prices have seen their bills soar in recent months. They do not fall within the scope of the tariff shield, nor in the increase applied from this Wednesday, as TF1 reminds.
“Consumers who had signed an electricity or gas supply contract whose prices were indexed on the markets are not protected by the price shield. This is also the case for consumers whose supplier has changed the current price contract to index it to market prices”, explains the energy ombudsman. “These consumers have thus seen themselves, following the energy crisis, apply prices whose amount was very clearly higher than that which they had planned, sometimes multiplied by two, even three or four.”
About 100,000 housing units in social housing, collectively heated by electricity, are also indirectly affected by the increase in electricity prices, notes AFP. Three decrees published in the Official Journal dated December 31, 2022 detailed the aid schemes for collective residential housing for 2022 and 2023. “These decrees create, with regard to electricity, and extend, with regard to gas, a specific aid system for residential collective housing”, recalled the Social Union for Housing (USH) in early January in a press release. “They provide additional aid for contracts signed in the second half of 2022, and partially cover the difference between the purchased price and the regulated price,” said the USH.
The most modest are more strongly affected by the increase
The most modest are more strongly affected by the increase in energy prices. “Because the share of transport and housing expenditure is a little higher in their consumption basket, households with the lowest incomes are more strongly affected by the rise in energy prices”, underlined INSEE. Nevertheless, “the shield measures, however, particularly mitigate inflation for the most modest and oldest households.”
From 2021, and especially after the Russian invasion of Ukraine, energy prices have reached levels never seen in modern history in Europe. Many states have subsidized prices for individuals to avoid shock bills, France cutting edge for an increase limited to 15% on average this year, until June 30, 2023 at least. This average increase of 15% in regulated tariffs, “it remains a shield”, argued the president of the Energy Regulatory Commission (CRE) Emmanuelle Wargon at the end of December.
The increase is the result of political arbitration, with the key to budgetary considerations for the State, which bears 85% of the increase. “We are the most protective country for households”, claims the Ministry of Energy Transition. Thus, 45 billion euros are planned in 2023 for the tariff shield, including 27 billion for electricity.