The abolition of regulated gas tariffs, a measure put in place in 1946, will come into force on July 1, 2023, in accordance with the competition principle of the European Union. This major change will force a quarter of French gas consumers to change their contract.
The regulatory system, which was reviewed monthly, was intended to prevent excessive tariff increases. From July 1, this regulated tariff will be withdrawn, and current beneficiaries will have to switch to a new offer. This change raises concerns among many French households whose energy bills have already increased significantly for more than a year.
Understanding the Regulated Gas Tariff
Introduced in 1946, the regulated gas tariff (TRG) was determined by the public authorities, taking into account the recommendations of the Energy Regulation Commission (CRE). It reflected supply costs borne by suppliers in wholesale markets, storage costs, transport costs and taxes. This mechanism, revised each month, aimed to prevent any abusive increase in tariffs.
Why is it removed?
In 2017, the Council of State concluded that the regulated tariff was contrary to European competition law. The energy-climate law, adopted in 2019, formalized its abolition on July 1, 2023. Since the promulgation of this law, it is no longer possible to subscribe to new contracts at the regulated tariff. However, customers who signed a contract before this date have the option of maintaining it until June 30.
Who is concerned ?
The end of this measure affects more than 2.6 million households, small condominiums and social buildings, or 25% of gas consumers. In addition to this, 3 million French people have a contract indexed to the regulated tariff. If the price of these contracts is determined by the supplier, it is adjusted according to variations in the regulated tariff.
Holders of a regulated contract have received several letters, from their supplier or from the government, inviting them to choose a new offer. For those who have subscribed to a market offer indexed to the regulated tariff, the Ministry of Energy Transition assures that “new tariff clauses” will be proposed soon.
What are the choices to be made?
Currently, the 2.6 million customers affected have the choice between four types of contracts:
- The “gateway” offer : If no action is taken, customers will be automatically transferred to a new contract at market price offered by Engie or a local supplier. In this offer, “the evolution of the price may vary each month by following the benchmark index of the Energy Regulation Commission. The calculation of this new index, published each month by the CRE, is determined according to “short-term variations in wholesale prices” on the gas market.
- Fixed price offers : These contracts offer a fixed price per kilowatt hour for a fixed period. However, taxes and the price of the subscription may change.
- Variable price offers : In this type of contract, the bill fluctuates each month depending on gas prices, both upwards and downwards.
- Offers indexed to the reference price : In this case, the prices change according to the reference price at the same frequency and in compliance with the level of indexation defined in the contract.