To smooth the extinction of regulated tariffs [in French]

Summary : The liberalization of electricity markets in Europe sounded the knell of regulated tariffs for domestic customers. The administrative regulation of price does not seem compatible with the European community-based objectives aiming to build an integrated market and fostering retail competition. For this reason, most of the European countries have already suppressed regulated tariffs. Moreover, these tariffs suffer from several flaws: they do not reflect price formation’s mechanism in the hourly wholesale markets, which include growing scarcity signals of fuel sources and environmental goods in the marginal offers. The integration of the French market with neighboring markets leads to higher and more sensitive prices to scarcity signals that prices which would prevail in an isolated French market. Due to their levels below market prices, regulated tariffs are not able to orientate correctly economic agents’ behaviors in terms of investment and sound use of electricity. Nevertheless, the transition to market prices in France without accompaniment measures is politically and socially not acceptable. A solution has then to be found to support regulated tariffs extinction in their current forms. This article proposes to implement a mechanism hinging upon a new tariff formula, incorporating market prices but organizing a redistribution to households and professionals through a support scheme to energy efficiency and thermal renovation. Compatible with market liberalization expectations, this simple and transparent mechanism, has the virtue to lead consumers towards energy efficient behaviors and equipment choices, contributing therefore to the reduction of greenhouse gas.

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