On June 30, regulated gas sales tariffs (TRV) will disappear. 2.3 million Engie customers are directly affected and must change their contract when more than 4 million households, holders of contracts indexed to this monthly rate, find themselves in the expectation. Should they be afraid of runaway prices?
The cleaver has never been so close. On June 30, regulated gas sales tariffs (TRV) will disappear. Despite repeated requests from consumer defense associations such as the CLCV, which argued that the customer’s contractual security is weakened by this decision, the government has not backed down.
As provided for in the Energy and Climate Law promulgated in 2019, which was based on a decree of the Council of State, the TRVs will therefore be abolished directly for 2.3million Engie customers and will affect more than 4 million households whose contracts are indexed to this monthly tariff proposed by the Energy Regulation Commission (CRE) and endorsed by the Ministry of the Economy. What effect will this have on July bills? Should we fear a runaway price? MoneyVox takes stock.
A reference price instead of the TRV
From July 1, a reference price which will follow a calculation methodology in line with that of the old gas TRVs with the aim of reflecting the methods of construction of suppliers’ market offers will be put in place, details CRE MoneyVox . Concretely, a price for a household using gas for heating, a price for a household that cooks with gas and a price for a small condominium consuming 150 megawatt hours per year will be defined as a reference each month.
The reference tariff will not protect the consumer as such, because no supplier is obliged to offer an offer at this price, unlike the gas TRV. Nevertheless, it constitutes a reference for the consumerof an offer at a reasonable price and makes it possible to compare it with an offer which it will potentially subscribe to, explains MoneyVox Lucile Buisson, Energy project manager for UFC-Que Choisir.
Reassuring? Unlike its equivalent in electricity, the gas TRV is not a fixed price. This tariff changes every month, depending on the course of the wholesale price of natural gas. It therefore does not protect the consumer. During the winter crisis of 2021-2022 and 2022-2023, it was not the TRV that protected the consumer, but the tariff shield, temper with MoneyVox Julien Tedd, co-founder of the broker Opera Energie. In addition, the formula for calculating the reference price is substantially similar and uses monthly prices (80%) – the most fluctuating – quarterly and annual.
Stable prices in July?
But then what will the prices be in July? CRE entrusts MoneyVox don’t make predictions As for the evolution of prices and invoices, the organization chaired by former minister Emmanuelle Wargon has already been able to change with the suppliers who will mostly use the CRE supply cost reference in their future offers.
Despite the disappearance of many suppliers at the heart of the energy crisis, it is likely that a number of them will again offer offers this summer, MoneyVox, the energy mediator, Olivier Challan Belval, recently indicated.
Stable prices also in the medium term, according to Adeline Jubert, energy representative at broker MeilleurTaux. She estimates with MoneyVox that alternative suppliers will refer to the reference price to position themselves, which will automatically regulate the market, which will therefore be more competitive. The important deadline for consumers seems to me to be more at the end of the gas tariff shield, i.e. December 31, 2023, than at the end of the TRV on June 30, asks Julien Tedd.
A situation corroborates by lower prices on the wholesale market, even if consumers are not currently benefiting from it. Today, the megawatt hour of natural gas delivered in 2024 in France is trading at around 50 euros/MWh against 300 euros/MWh at the end of August 2022 for delivery in 2023.
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Advantageous offers to come
We can even expect lower bills, at least more advantageous available offers, judge Lucile Buisson of UFC-Que Choisir. To date, on the association’s comparator, there are 16 main gas offers, offered by 12 different suppliers. Some are very slightly more advantageous than the TRV for gas, but except in the case of indexation to the TRV – which will disappear at the same time as it – nothing guarantees this price advantage over time since the supplier may unilaterally modify the contract subject to notifying the consumer at least one month in advance.
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On the side of the energy mediator, 24 offers for 15 suppliers are referenced, not counting the areas managed by a local distribution company, such as Strasbourg, Colmar, Bordeaux or Grenoble. Some offers are cheaper than the paid rates, but some are much more expensive, up to twice as much. It is therefore necessary to compare the price of the offers carefully and to be careful in the event of canvassingsays Caroline Keller, head of the information and communication department of the energy mediator MoneyVox.
Finally, the only offer that provides some visibility today is Passerelle, the Engie offer that will replace the regulated gas tariff. An offer which will automatically switch, from July 1, customers to the TRV of the historical supplier. The price of this contract, which can be canceled at any time, will be indexed to the reference indicator calculated by CRE. In the meantime, the indicative price of Passerelle was in April at a level quite close to the regulated tariff, although slightly above, of around 3%, explains Engie MoneyVox. That is an additional cost of around 50 euros per year for a Parisian household of 4 people, for example. But Engie’s director of private markets, Florence Fouquet, anticipates a drop in the Passerelle tariff, below the level of the regulated gas tariff, which will disappear on June 30.
The danger of another market crash
Finally, the danger that awaits the consumer is a further rise in gas market prices in the event of a tight supply of natural gas to Europe for next winter, warns Julien Tedd. In this case, with the disappearance of the TRV, warns Lucile Buisson, no ‘reasonable’ commercial margin offer will no longer be offered to consumers.
To limit the risks, we can think that subscribing to a fixed price market offer is more protective than staying at the regulated price, explains Julien Tedd. This makes it possible to freeze its natural gas budget at a relatively moderate level. And therefore not to suffer a possible new increase during the next winter.
Moreover, if you are the holder of a fixed price contract with Engie, and even if this is close to the TRV level, your contract will run its course until its expected chance, even after the disappearance of the tariff regulated at the June 30th.
Be that as it may, the consumer retains his freedom at any time and can change the offer, as well as the supplier, without delay and free of charge. It’s a good opportunity to look at your bill closely, says Adeline Jubert. And why not find a way to optimize it.