Paris, July 19. 2012
The AFIEG (French Independent Association of Electricity and Gas) has expressed its position on the recent increase in regulated prices for natural gas decided by the French government. AFIEG considers this increase as a limited application of the legal principle defining the compensation of supply costs paid by the main energy operator in the country. This increase is not a consequence of the progressive opening of the market to competition, which, on the contrary, allows for prices decrease.
The European Commission has recently asked France to put its national legislation on natural gas regulated prices for non-residential final clients in line with European Union rules. The Commission stated that “regulated prices are a disrupting factor for gas markets because they don’t reflect real needs and hinder the possibility of an efficient competition”. It also considers that maintaining such prices is an obstacle to the establishment of a real internal European energy market.
AFIEG agrees with this analysis. Therefore, it appears that natural gas regulated prices for prosumers are not justified anymore, all the more so because they are fully able to benefit from the positive effects of open competition in the gas market.
Consequently, the lifting of natural gas regulated prices for non-residential clients would allow them to identify the best prices they can get. Prosumers themselves seem to agree with this principle: indeed, 75% of these companies have chosen market price offers instead of regulated prices.
AFIEG is willing to work on this subject with the CRE (Commission de Régulation de l’Energie), whose recommendations, as stated in September 2011, are in line with ours.
According to Fleur Thesmar, “the fast-evolving natural gas sector doesn’t require regulated prices for non-residential clients anymore”.