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France

The new French Electricity Act

Despite the belated introduction of the Electricity Act (the Act)on February 10 2000 - one year behind schedule - and the adoption of a few implementing decrees, full opening of the French electricity market is not expected before this autumn. In June 2000, the EC Commission challenged the mandatory three-year duration of supply contracts, provided for in the Act.

The public supply of electricity

In essence, the public supply of electricity encompasses the supply of electricity to non-eligible customers at equal tariffs (set by the state) throughout the territory and the operation of public transmission and distribution networks. Electricité de France (EDF) and certain local distribution monopolies are entrusted with these public services obligations and are entitled to claim additional payments through a public service fund.

New rules of generation

Within the framework of a long term investment plan, new generation capacities are permitted pursuant to either a licensing or a public tender procedure.

The grid

The public transmission system (the grid) is managed by a specific independent body within EDF which must comply with a number of obligations derived from statute. These include transparency, non-discrimination, accounting unbundling and confidentiality vis-à-vis EDF.

Eligibility

Under the Act and the implementing decree of May 29 2000, the eligibility threshold is set at 16 GwH per year. The status of "eligible site" is determined by the relevant minister pursuant to a declaration procedure.

Regulation and competition

A new independent administrative body, the Commission de Régulation de l'Electricité (CRE), has been set up and organized by the decree of May 2 2000. The CRE enjoys a wide array of powers, including the ability to set the level of access charges to public networks and additional public services charges, both of which are ultimately controlled by the relevant minister. The CRE may settle disputes concerning access to public networks under the judicial review of the Paris Court of Appeal. The close co-operation of the CRE with the competition council is also provided for.


Herbert Smith
Paris
Tel: +33 1 53 57 7070
Fax: +33 1 53 57 7080

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