A tax will cause the price of electricity to explode from February 1st, here is what awaits you on your next bill

THE electricity price will increase between 9 and 10% on averagefrom 1^er FEBRUARY. But in reality, the increase could be even greater, the fault of one of the taxes which appear on your bill, which will explode.

Understanding the increase, unfortunately expected, feared and then approved, in regulated electricity prices can be a magic trick. And if the Minister of the Economy announced an increase of 8.6% in electricity for basic homes and 9.8% for peak and off-peak contracts, the bill could climb well beyond of these theoretical figures. The increase in one of the taxes levied by the State, the excise, will have more consequences than we think. We wanted to help you understand how this works on your bill.

A tax, previously discreet on your bill, will explode and cause your electricity expenses to jump

To fully understand electricity taxation, you need to know that on each of your bills, three taxes are levied: VAT, of course; the transport tariff contribution (CTA); and what we now call “excise”, ex-contribution to the public electricity service (CSPE). It is precisely the latter which is the instrument of the bad news announced on Sunday by Bruno Le Maire.

Since 1^er February 2022, you do not pay excise at its full rate. Individuals are protected by the famous tax shield, which limited the levy to 1 euro/MWh (megawatt hour), or 0.001 euro per kWh (kilowatt hour). This amount can be found at the bottom of your invoice, in the “Taxes and Contributions” section. Without the tax shield, the excise would reach 32.0625 euros/MWh, or 32 times more!

So what will happen from 1^er FEBRUARY ? This tax, the excise, will increase from 1 euro/MWH (0.001 euro/kWh) to 22.54 euros/MWh (0.02254 euro/kWh). So imagine that if this amount explodes, it still remains slightly under protection of the shield. It is already planned that in February 2025, the full price (32.0625 euros/MWh) will apply! Now, what does all this change about your bill starting next month?

Electricity price expected to rise more than government forecast

Until now, on your invoice, the line corresponding to the excise (CSPE) displayed a rate of 0.001 euro/kWh, excluding tax. From February 1, it will increase to 0.02254 kWh. To fully understand the evolution of your final bill, let’s do a little calculation.

Let’s say you consume 1,000 kWh over two months (generally equivalent to one billed period). Until now, you paid 1 euro excluding VAT, or 1.20 euros with 20% VAT which applies subsequently. As of 1^er February, this same consumption will cost you, for excise alone, 22.54 euros excluding VAT, or 27.05 euros once VAT is applied. For the same consumption, your excise will cost you 25.85 euros more, an impressive increase of 2,154% on this line.

On the scale of an invoice including tax for an amount of 150 euros, you will therefore have to add 25.85 euros, or 175.85 euros in total, for an increase of 17%.

Obviously, this increase is not fixed. It may be lower, depending on your contract, your consumption depending on the hours or days (Tempo option), as it may also be higher. The increase of less than 10% mentioned by the government therefore immediately seems further from reality than ever. It’s now up to everyone to make their own calculations.

Sources: Clubic, CRE, economy.gouv.fr