France’s Industrial Giants Call for Price Cap on Nuclear

France’s biggest electricity users urged the government to cap Electricite de France SA (EDF)’s wholesale nuclear-power price at the current level to help industrial consumers compete with German rivals.

The competitiveness of large French power consumers has “dropped off in a way that is extremely worrying,” the Uniden lobby group said today in a statement. The regulated rate is set at 42 euros ($58.50) a megawatt-hour.

Uniden has written a position paper in response to a state consultation on power prices. While the body’s 41 members, which include PSA Peugeot Citroen (UG) and Total SA (FP), strive to compete with foreign peers, EDF has embarked on a cost-cutting drive as spending increases to maintain and upgrade its 58 reactors.

France has said it will announce any revisions to the power rate or the way it’s calculated at the end of the month. The government already forces state-controlled EDF to sell about a quarter of its nuclear output to other French distributors to increase domestic competition. The country gets about three-quarters of its power production from EDF’s atomic fleet.

Large German industrial power users will pay 35 percent less for their electricity next year than those in France, Uniden said. “Even more preoccupying” is France’s inability to compete with North America, where the boom in shale gas has lowered the cost of energy supply, it said.

EDF, based in Paris, has said it can’t make ends meet unless it gets permission to raise the price of wholesale nuclear power.

“One can’t demand of a company to sell a quarter of its output below cost in the long term,” Chief Executive Officer Henri Proglio said last month. The regulated rate helps EDF make “a step toward” meeting its costs of 50 euros a megawatt-hour, he said.

Uniden called for tighter control of EDF’s costs and more “visibility” on the power price over the next five years.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Amanda Jordan, John Viljoen

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