EDF Drops on Concern About Power Rates, Spending Under Hollande
Electricite de France SA, the biggest nuclear operator, dropped the most in more than three weeks on worries that President-elect Francois Hollande will hold down regulated power rates while demanding investment to create jobs.
EDF fell as much as 3.2 percent and traded down 22 cents at 16.11 euros at 12:03 p.m. in Paris. The shares have lost about 43 percent over the past year.
Hollande’s victory “doesn’t bode well for regulated activities,” Chicuong Dang, an analyst at Richelieu Finance in Paris, said by telephone. “There are worries that any measures to boost growth will involve spending for EDF.”
Hollande, who won the French election with 51.6 percent of the vote, has pledged measures that could affect EDF, as well as former state-controlled natural-gas monopoly GDF Suez SA (GSZ) and Total SA (FP), Europe’s third-biggest oil company, which has gas stations across the country. The proposals include shutting one atomic plant in eastern France, a new system for energy and water rates and a freeze on pump prices pending levy revisions.
GDF Suez dropped as much as 1.7 percent and traded down 5.5 cents at 17.035 euros. The shares have declined about 35 percent over the past year.
Hollande has pledged to shut EDF’s oldest reactor at Fessenheim during his five-year term. This eased concerns last year that he’d take more reactors offline amid a pledge to boost alternative energy. EDF provides more than 75 percent of France’s electricity, a proportion Hollande has promised to cut to about 50 percent by 2025.
The Socialist president-elect has also promised to put in place “progressive rates” for water, power and natural gas that would make them more affordable for low-income households.
Another of Hollande’s proposals is to freeze gasoline and diesel prices for three months to give the new government time to revise the fuel tax system. More generally, Hollande wants to boost economic growth in part through additional spending.
The measures would be put in place after a government has been named, Bernard Cazeneuve, a spokesman for Hollande, told LCI television today.
To contact the reporter on this story: Tara Patel in Paris at firstname.lastname@example.org