UPDATE 2-EDF plays down power bill reimbursement fears

Thu Nov 29, 2012 11:39am EST

Related Topics

* Says court ruling won't effect results

* Denies it could have to reimburse 8.8 bln euros

* Shares rebound after hitting record low

* Regulator says too soon to draw conclusions

* ERDF unaware of any possibility of reimbursement (Recasts with EDF denial)

By Benjamin Mallet and Alexandre Boksenbaum-Granier

PARIS, Nov 29 (Reuters) - French power group EDF said that a court ruling overturning part of its pricing plan would not force it to reimburse clients and would have no effect on its financial results.

The state-controlled company moved to calm investors on Thursday after a newspaper report said that it could have to pay back 8.8 billion euros ($11.4 billion) to customers because of the Wednesday ruling by the Council of State, France's top administrative court.

EDF stock tumbled 6.1 percent to a record low of 13.39 euros in early trade, wiping off 1.6 billion euros from its market capitalisation. The shares later recovered to be down only 1.3 percent at 1615 GMT.

The issue relates mainly to part of the electricity bill calculated by France's CRE energy regulation commission, amounting to more than 30 percent of the total sum paid by consumers.

These tariffs are paid by electricity providers as a kind of toll to use the network of EDF's ERDF unit, which delivers the electricity to end-users.

The court overruled the way these had been set between mid-2009 and mid-2013.

But EDF said in a statement that the ruling did not bear on its regulated tariffs and "will not lead to any reimbursement of its clients because it does not concern them".

It added that there would be no impact on group financial results.

INVESTOR WORRIES

Le Parisien newspaper had reported that EDF may have to reimburse 1.9 billion euros for each year as a result of the ruling. The newspaper did not specify how it calculated the number.

ERDF has also received 1.2 billion euros too much towards investments during the period, the paper added, bringing the total to 8.8 billion euros.

"The figure seems huge and won't help the stock to recover," said Renaud Murail, a portfolio manager at Barclays Bourse. "If it is confirmed, it risks creating great uncertainty surrounding the group's outlook."

The company's share turnover on Thursday was triple the three-month daily average. The stock has fallen by nearly a quarter since mid-September and investor worries about government caps on tariff increases have long weighed on its performance.

Over the past five years the shares have dropped by 85 percent, shrinking its market capitalisation to 26 billion euros. By comparison, the company - which operates 58 nuclear reactors in France - is investing in next-generation EPR reactors that have a price tag of about 5 billion euros each.

Separately on Thursday, the Council of State also suspended a government decision to cap natural gas tariff increases to 2 percent, directing the ministries involved to come up with a new policy within a month.

The CRE said that it was too soon to understand the impact of the ruling. It plans to start work on a new tariff level in the coming weeks, which will apply retroactively.

The head of ERDF, Michele Bellon, said in an emailed statement that she was "unaware of any possibility of reimbursement".

Other ERDF officials said that any reimbursement would be to energy suppliers rather than to consumers.

The final decision on tariff levels rests with the government. ($1 = 0.7746 euros) (Additional reporting by Blaise Robinson; Writing by James Regan and Christian Plumb; Editing by Lionel Laurent and David Goodman)

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