Prime Minister Michel Barnier announced that electricity taxes will remain unchanged in the upcoming finance bill, allowing for a 14% reduction in regulated electricity bills starting February 2025. This improvement comes as a relief for consumers, especially with falling wholesale prices. While the excise tax will revert to pre-crisis levels, the anticipated savings could be substantial: a typical consumer using 2,220 kWh annually may save around 100 euros, while those consuming more could see savings of up to 325 euros.
Exciting News for Electricity Consumers
In a significant shift, Prime Minister Michel Barnier has revealed that taxes on electricity will remain unchanged in the upcoming finance bill, reverting to pre-energy crisis levels. This decision comes as a relief for consumers on regulated tariff offers, as they can anticipate a notable reduction in their bills—projected at around 14% starting in February 2025, rather than the previously estimated 9%. Let’s delve into how this change could impact your expenses starting next February.
Understanding the Impact of the Decrease
The initial announcement indicated a 15% drop in the regulated electricity sales tariff, but later adjustments brought that figure down to 9%. However, consumers are now looking forward to a 14% reduction next February. “I have decided against raising taxes on electricity in the 2025 finance bill,” Barnier stated to Figaro on Thursday, November 28, as a strategy to sidestep a motion of censure.
While the excise tax is expected to rise from its current rate of 21 euros per MWh back to the pre-crisis level of 32 euros per MWh, it is important to note that this tax, known as TICFE, affects all consumers’ bills. This tax had been lowered during the energy crisis, and the government had initially planned a more substantial increase.
The anticipated decrease in electricity bills is largely due to falling wholesale market prices, which will be reflected in the regulated tariff come February 2025. According to the Prime Minister, those who have opted for a regulated tariff or a market offer linked to it can expect a significant “14% decrease in electricity prices, surpassing the initially proposed 9% reduction.”
How Much Will You Save?
What kind of savings can you realistically expect? Here’s a preview of potential savings, though we must await official calculations and rate announcements from the CRE for confirmation. While a 14% average decrease is anticipated, not all offers may experience the same reduction.
For instance, a typical consumer who uses 2,220 kWh annually (the average consumption in France) with a 6 kVa meter currently pays 711 euros per year on EDF’s regulated tariff, base option. With a 14% decrease, this consumer could save 100 euros annually, bringing their total to 611 euros.
For those with a higher consumption, consider a consumer using 8,500 kWh per year with a 9 kVa meter, who currently pays 2,320 euros. A 14% decrease would lower their annual bill to 1,995 euros, representing a savings of 325 euros.
In the case of the Tempo option, a customer with the same annual consumption, where 40% is used during off-peak hours and 60% during peak hours, currently faces a bill of 1,631 euros. This 14% reduction would bring their costs down to 1,401 euros, saving them 230 euros annually. For the peak and off-peak hours formula, the same consumption ratio would adjust the bill from 2,282 euros to 1,962 euros, resulting in savings of 320 euros per year.