companies will benefit from a tariff shield

This is the government’s plan B to support companies facing soaring electricity prices. It was presented to employers’ organizations on Friday 21 October. This device says “price guarantee” is a kind of tariff shield in which the State would bear up to half of the bills, when the contract proposed by the supplier stipulates one megawatt hour (MWh) beyond €325.

This is well below current prices. On the spot market, the MWh is currently at €544 for the year 2024, and even above €1,000 for delivery in December and January. The details of the plan should be unveiled at the beginning of the week, before being incorporated into an amendment to the finance bill. The cost of the measure is evaluated according to Bercy around 7 billion euros. An amount which could however increase in the event of strong tensions on the market.

A European agreement difficult to find

The government hoped not to have to draw this new mechanism. But the difficulties in reaching an agreement in Brussels to lower electricity prices forced him to review his plans.

At the end of a European Council lasting more than ten hours on Thursday 20 October, which ended in the middle of the night, the Heads of State and Government thus asked, once again, the Commission to submit to them “urgently” of the “concrete decisions”. But for the moment, France has still not succeeded in convincing Germany to introduce a cap on the price of gas used to produce electricity on a European scale, a transitional measure only granted in the spring to the Spain and Portugal.

The risk of cascading failures

So make way for national support measures, even if they have to get the green light from the Commission. There is urgency, because many companies must renew their electricity contract for next year.

“It’s five minutes to twelve, the clock is ticking and we’re moving forward in the fog”, underlined François Asselin, the president of the Confederation of small and medium-sized enterprises (CPME), Thursday, October 20. If nothing is done, 150,000 companies will face a dead end on their energy bills by the end of the year, he explained, referring to “a systemic risk in terms of failures”.

The Union of Local Businesses (U2P), which represents craftsmen and traders, had also sounded the alarm, recalling that given the scale of the increases, it is difficult to pass them on in full to the customer.

crazy bills

Many business leaders should therefore breathe a sigh of relief, even if for them, the price cap around €325 per MWh, as proposed by the government, still represents an electricity bill multiplied by four or five. , or even more, compared to 2019. This is the case of Laurent Pillard, boss of a training organization and a small printing press in Saint-Ouen-l’Aumône (Val-d’Oise). He pays €4,500 for electricity this year, based on €87 per MWh. Engie offered to renew the contract in 2023 for… €75,000, i.e. the MWh at €1,500. By using a broker, he hopes to bring the bill down to €25,000.

Marie-Emmanuelle Contesse, financial manager of Mecanhydro, an SME with six employees specializing in hydraulic maintenance based in Chambéry, is just as distraught. For 2022, it paid €7,571 for electricity and received two offers for 2023: one at €18,608 per year, from the supplier EkWateur, if it commits to three years, and another from TotalEnergies , at €26,291 for a two-year contract.

“The first contract would take away 11% of the result and the second about 20%. This will limit our hiring and investment prospects, but also our borrowing capacity.she explains, while the company must already repay its loan guaranteed by the State (PGE), contracted at the time of the health crisis.

Hard-to-get help

Marie-Emmanuelle Contesse wanted to put solar panels on the roof of the factory, but no insurer wants to cover her, citing increased risks of fire. The financial manager of Mecanhydro also asked to benefit from the emergency aid, put in place on July 1 by the government, with an envelope of 3 billion euros, “but we don’t meet the criteria”she says.

The cost of energy had to exceed 3% of turnover, which had doubled since last year, but also show a 30% drop in gross operating surplus over a quarter. Since then, the government has simplified the device and promised to do it again. He finally chose a generalized support system.


Salary agreement at EDF

The management of EDF and the unions reached an agreement on Friday, October 21 on wage increases. This should end the strikes that were disrupting maintenance work at 18 nuclear reactors. Agents will get a 5% raise for low salaries up to supervisors. Management will benefit from a 2.5% increase and bonuses. To this must be added the branch agreement which provides for all an increase of 3.3% and 80 € gross per month in 2023 for low wages. EDF’s payroll could increase by 9.47% next year, according to a union source.

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