Electricite de France SA, Europe’s biggest power producer, dropped in Paris trading on concern that a wholesale price for its nuclear output will be less than what the utility is seeking.
French Industry Minister Eric Besson yesterday said the government has asked Paul Champsaur, architect of the country’s electricity-market overhaul, to help determine how much EDF should charge rivals for nuclear power.
The decline in the share price is “clearly linked to the nomination of Paul Champsaur,” Louis Boujard, an analyst at Aurel BGC in Paris, said by telephone. “The price may not be entirely what EDF wants.”
Lawmakers last week adopted a bill that will force EDF to sell as much as a quarter of its nuclear output to rivals. The law, based on a 2009 report by Champsaur, is designed to avert possible sanctions by the European Commission for EDF’s dominant position in its home market. The price at which EDF sells the power to companies such as GDF Suez SA is key to whether they can compete in France, where prices are regulated.
EDF Chief Executive Officer Henri Proglio, who fought the legislation, has said the price for nuclear output should be a minimum of 42 euros ($54.87) a megawatt-hour to account for full production costs. GDF Suez SA CEO Gerard Mestrallet backs 35 euros a megawatt-hour to allow competition for household customers without raising regulated rates.
“A price in the range of 38 euros a megawatt hour won’t be a positive catalyst for EDF; it will be more neutral,” Boujard said.
The price set by the government will likely be “less than” an existing tariff of about 42 euros a megawatt-hour, Jean-Claude Lenoir, deputy for the ruling Union for a Popular Movement party, said in an interview last week.
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