French state says EDF price hike will be limited

PARIS, July 19 (Reuters) - The French state wants future increases in electricity prices to be "extremely limited" and is opposed to EDF's (EDF.PA) proposal to raise them by 20 percent over 3-4 years, the president's chief of staff said on Sunday.

The French state still owns 85 percent of the energy giant and decides tariffs.

But EDF, which floated on the Paris stock exchange in 2005, wants to raise prices to help finance planned investments. "I have found it regrettable that the president of EDF worries French people with prospects of increases he knows well the government... will not support," Claude Gueant, Chief of staff of French President Nicolas Sarkozy, told French radio Europe 1 on Sunday.

Gueant said France had invested heavily in its energy infrastructure in the past decades to offer residents and industries cheaper electricity prices than in many other European countries.

"We do not want to raise electricity prices in France to the same level as elsewhere," Gueant said. "If there is an increase, it will be extremely limited."

Gueant said the French government would make public its decision on electricity prices "in the next few weeks."

EDF Chief Executive Pierre Gadonneix is calling for a price increase to help finance the company's investments in its 58 nuclear plants in France.

EDF is to invest 7.5 billion euros in France in 2009, some 2.5 billion euros more than in 2008.

(Reporting by Astrid Wendlandt; Editing by David Cowell)