France to raise regulated household electricity prices by 10% from August

The French government has decided to raise regulated household electricity prices by 10 per cent starting from August.

In May, Finance Minister Bruno Le Maire said France’s cap on electricity prices would be phased out and end at the end of next year, Reuters reports citing Les Echos.

European electricity prices soared last year, mainly driven by the fallout from the war in Ukraine.

France also saw record-low nuclear output as state-owned utility EDF repairs reactors affected by stress corrosion.

The 10 per cent increase will add about 9 euros ($10.6) to the average monthly electricity bill of a household, according to the government official.

The official said that this will be the only price hike until February 2024, when a new tariff formula will be introduced to align regulated prices with market prices more closely.

The official also said that low-income households will continue to benefit from social tariffs, which are lower than the regulated tariffs and are not affected by the increase.

The government expects that the price alignment will encourage more consumers to switch to alternative suppliers, which offer cheaper and greener options.

According to the energy regulator CRE, the market share of alternative suppliers rose from 17.9 per cent in 2018 to 25.6 per cent in 2020.