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France Turns to Champsaur to Advise on EDF Nuclear Power Price

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Dec. 1 (Bloomberg) -- The French government has asked Paul Champsaur, architect of the country’s electricity-market overhaul, to help determine how much Electricite de France SA should charge rivals for nuclear power.

“The objective is simple, to keep the competitive advantage linked to nuclear energy,” Industry Minister Eric Besson said today at a press conference. Champsaur will have less than three months to hand in his report, the minister said.

Lawmakers last week adopted a bill that will force EDF to sell about 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.

The law gives the criteria for deciding the price, and Champsaur will offer proposals, Besson said. “The government will then decide.”

The government is working on an accompanying decree, due early next year, adding details about how the law will be applied, Besson said. The wholesale price will be published in a separate ordinance at a later date, he said.

Opposing Views

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.

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 last week.

EDF will have to sell as much as 100 terawatt-hours of power a year, according to the text of the law on the website of the National Assembly. The volume will be determined by the government and depend on how competition develops in the French market. EDF said this month nuclear output is expected to range from 405 terawatt-hours to 415 terawatt-hours in 2010.

The government and Proglio will review EDF’s maintenance plans for existing reactors, Finance Minister Christine Lagarde said today at the same news conference.

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

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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