In a context of public accounts in the red, the Barnier government could increase the domestic final consumption tax on electricity more than expected, which risks ultimately leading to an increase in prices for individuals who are not on the tariff. regulated.
Not sure that electricity bills will fall as much as expected, the fault of the state of public finances. The Ministry of Budget and Public Accounts confirmed this Sunday, October 6, information from the newspaper The Parisian according to which the government would consider increasing a tax beyond the level before the energy crisis. According to the newspaper, “Bercy is working to increase the domestic final consumption tax on electricity (TICFE) beyond 32.44 euros per megawatt hour, which was the level of taxation before the inflationary crisis.”
The ministry acknowledged to AFP that this hypothesis was being studied: “It is planned to go further but for the moment there is nothing definitive, it will be submitted to parliamentary debate”.
The previous government organized the gradual end of the tariff shield – which is very expensive for the State, estimated at 110 billion euros from 2021 to 2023. Gabriel Attal’s executive thus increased the amount of the TICFE in February, from 1 euro to 21 euros per Megawatt-hour (MWh), and intended to bring it to 32.44 euros per MWh in February 2025, i.e. its level before the surge in inflation, while this tax had been lowered in minimum to relieve the bills of the French during the energy crisis. Raising it to 32.44 MWh should allow the State to recover 5 billion euros.
From individuals to businesses, everyone is affected by the increase in the TICFE: subscribers to the regulated EDF tariff (the so-called blue tariff, the peak/off-peak tariff, or the Tempo offer), i.e. more than 20 million customers, but also individuals and professionals who have subscribed to a fixed or variable price market offer from an alternative supplier.
“Double punishment”
The Minister of Ecological Transition and Energy, Agnès Pannier-Runacher, herself warned this Sunday against “the risk” to go too far in increasing this tax. The fall in prices on the international market “allows us to return the tax that the French paid before the energy crisis to the pre-crisis level”, i.e. 32 euros MWh compared to 22 currently, declared the minister on France 3. “Simply, we must not go beyond”she said. Under penalty in particular of reducing the bill of certain modest French people not subject to the regulated electricity tariff.
Agnès Pannier-Runacher called to be “very vigilant”. “If we go beyond [des 32 MWh]the risk is that there will indeed be an increase in the price of electricity. We must be very vigilant because modest French people and the middle classes […] will have double punishment. They are often the ones who live in thermal colanders.according to the minister.
I hear speculation here and there about electricity taxation.
I want to be clear today: it has not been decided, and it is Parliament which will have the last word on the budget presented by the government.
I will be vigilant: if it is normal to go out… pic.twitter.com/AMXCTZBTFs
— Agnès Pannier-Runacher 🇫🇷🇪🇺 (@AgnesRunacher) October 6, 2024
Despite the end of the tariff shield, French people with regulated tariffs should nevertheless expect a reduction of at least 10% in their bills by the same deadline, the Energy Regulatory Commission announced in September.
The government spokesperson, Maud Bregeon, went in this direction this Sunday noon: “The drop in market prices will more than offset the increase in this tax. We will be around 10% [de baisse] for the 80% of French people who are at the regulated electricity rate”at the microphone of the show Political issues.
But if the tax rises beyond 32 euros per MWh, the consequences could be different. If applicable, “despite the increase in this tax, there will still be a drop in prices of 9% expected in February 2025, or around 110 euros less on average on the annual bill, for the 80% of households under regulated prices” electricity, the ministry assured AFP, without quantifying the expected impact on state revenue of such an increase in the tax.
Within the framework of regulated tariffs, the price is set by the public authorities, on a proposal from the Energy Regulatory Commission (CRE). “The 20% (of customers) who have unregulated rates can easily switch to regulated rates,” the Ministry of the Economy stressed to Agence France Presse.