by Benjamin Mallett
PARIS, Jan 17 (Reuters) – The government’s decision to force EDF to sell more nuclear electricity at low prices to its competitors came as a “shock” to the public utility, its CEO said in a message to managers of the group, which plans to present measures within a month to strengthen its balance sheet and “protect its interests”.
The executive announced Thursday that, to limit the increase in regulated electricity tariffs (TRV) to 4% on February 1, it would increase from 100 to 120 terawatt-hours (TWh) the volumes that EDF must cede to its competitors within the framework of the Arenh system (regulated access to historical nuclear electricity), a measure likely to have an impact of 7.7 to 8.4 billion euros on the group’s results.
“After having fought it a lot, we experience this decision as a real shock,” said CEO Jean-Bernard Lévy in a message to EDF managers, obtained by Reuters, stressing that the measure “imposes itself” on the group then. that he defended “targeted alternatives for the benefit of customers most sensitive to price increases, mainly very small businesses and the most exposed factories”.
EDF suffered a heavy drop on the stock market on Friday after also announcing a downward revision of its nuclear production outlook for 2022 – due to reactor shutdowns linked to corrosion problems -, as well as a new delay and a additional cost of the Flamanville EPR project (Manche).
“This bad news shakes the group,” said Jean-Bernard Lévy.
“With the executive committee, we are examining the appropriate measures to strengthen the group’s balance sheet structure and any measure likely to protect its interests. What is at stake is our ability to preserve our strategic development. We intend to make these measures public within one month.”
The CEO also writes that he “shares (the) emotion” of those who have expressed “their support, even their indignation”, adding that the executive committee and himself remain “very combative”.
The CFE-CGC, as well as the association Energie en actions, which represents employee shareholders and former employees of EDF, have made it known in recent days that they reserve the right to take legal action against the government’s decision on the Arenh.
The union representatives of the employees on the group’s board of directors also said they were “scandalized” by the announcements of the executive and demanded that the State compensate “fully” the cost of these measures for EDF.
The management of EDF has already experienced a serious setback last summer when the government put on hold the project to reorganize the group, named “Hercules”, which was supposed to accompany a new regulation of the French nuclear fleet.
EDF believes that the current Arenh system constitutes a “poison” for it, forcing it into debt and limiting its investment capacity while subsidizing its competitors. (Edited by Nicolas Delame)