The state demands the “solidarity” of the suppliers with the companies

published on Wednesday, October 05, 2022 at 15:42

The state on Wednesday called for gas and electric utilities’ “solidarity” with the companies and pledged to issue its guarantee to facilitate contract signing related to “insane prices.”

The main energy companies, including EDF, TotalEnergies and Engie, had been summoned to a meeting in Bercy by Economy Minister Bruno Le Maire, who last week accused them of “not playing the game” by inflating the prices offered to SMEs.

Today, 1.5 million very small businesses are eligible for tariff protection, which limits increases in energy costs, Bercy reminded, but others are being offered deals at “outrageous prices” at the time of their contract renewals.

“We receive too many unacceptable cases: invoices with exorbitant prices, contract terms that are unilaterally revised, insufficient visibility of contracts,” underlined the minister at the end of the meeting.

In order to prevent companies from being left without an energy contract, the state pays the “risk premium” that companies demand from suppliers to protect them against possible payment defaults. “The state will set up a public guarantee for the bank guarantees that suppliers require from their customers when signing contracts,” explained Bruno Le Maire during a press conference with several ministers, including Agnès Pannier-Runacher (Energiewende).

The Bercy tenant stressed that this is a “fundamental and totally innovative element in energy contracts”.

“Basically, the state bears the risk of default by the customer,” a ministry source told AFP. Goal: “Reduce energy costs and give more companies access to more offers”.

– price limits –

Invited to join the “solidarity” effort, suppliers must make efforts and follow best practices in return. The main players in the energy sector, according to this code of conduct consulted by AFP, have committed themselves to a charter “to make at least one commercial offer to any approachable professional consumer who so wishes”.

In the charter, the energy suppliers promised in particular to warn customers who are not entitled to the regulated electricity tariff “at least two months in advance” of contract extensions or the end of the contract.

Suppliers and producers invited to Bercy also included the French Electricity Federation (UFE), the National Association of Retail Energy Operators (ANODE), the French Independent Electricity and Gas Association (AFIEG) and representatives of local distribution companies.

The minister warned that the “abusive behaviour” would be “sanctioned” on the basis of anti-fraud and Energy Regulatory Commission (CRE) investigations.

In order for companies to be able to better decipher the offers, the energy police officer CRE will also be publishing a weekly updated “reference price” for electricity on its website in the coming days. This information, aimed at companies with fewer than 250 employees, is broken down by several professional consumer profiles.

“We will not let you down,” promised the economics minister to “all companies” of all sizes, and reminded them that an envelope of 3 billion euros would be available from a single source.

“We will not allow rents to be built on delusional energy prices,” Le Maire warned, explaining the European mechanism aimed at capping the price of a megawatt hour for generators at 180 euros.

Mr Le Maire explained that above the €180 per MWh limit energy companies make in the market money would be used by the government to benefit companies and communities struggling with soaring energy bills.

Leave a Reply

Your email address will not be published. Required fields are marked *