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EDF Faces 2 Billion-Euro Shortfall on Renewable Subsidy in 2013

Dec. 18 (Bloomberg) -- Electricite de France SA faces a shortfall of 2 billion euros ($2.6 billion) for 2013 because a tax meant to pay for renewable and other energy subsidies won’t be increased enough, according to the regulator.

The levy is set to rise by 3 euros to 13.5 euros a megawatt-hour on Jan. 1 unless the government decides otherwise before the end of the year, the Commission de Regulation de l’Energie said in a statement today. That’s still short of the 18.8 euros needed to cover the charges, it said.

EDF, the biggest operator of nuclear reactors, has started talks with the government on financing the levy, which funds renewable energy as well as “social” power rates for low-income households. The shortfall has contributed to the utility’s debtload.

The costs of what the CSPE tax is supposed to pay for will rise 21 percent to 5.1 billion euros for 2013 compared with this year, the regulator said today. Subsidies for solar power will account for 41 percent next year, or 2.1 billion euros.

CSPE financing “is a problem,” Thomas Piquemal, EDF’s chief financial officer, said in July.

EDF’s net financial debt increased to 39.7 billion euros at the end of June from 33.3 billion euros at the end of last year. The CSPE tax accounted for 4.5 billion euros, according to an EDF presentation.

Forecasts for CSPE-linked costs next year don’t include financial costs and operational costs for EDF, the regulator said. The utility has asked that these be included.

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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