* EDF competitors say price caps distort the market
* Government to review tariffs in autumn
(Adds alternative producer comment, data on market shares)
By Geert De Clercq
PARIS, Sept 3 A top French court will rule next
week on whether to overturn a government cap on EDF's regulated
electricity prices, which could have an impact on the utility's
earnings and stock price.
An official at the State Council, France's highest
administrative court, told Reuters on Wednesday a ruling is
expected by the middle or end of next week.
The procedure follows a complaint by the Anode association
of alternative power producers against Energy Minister Segolene
Royal's decision to scrap a 5 percent increase in power tariffs
that had been scheduled for early August.
Royal's announcement of the price cap on June 19 shaved $5
billion of market value off France's dominant power supplier EDF
and an annulment of the cap could give the shares a
Days later, Prime Minister Manuel Valls said there would be
a tariff increase after all in the autumn, but of less than 5
percent. He has not talked about the issue since a cabinet
shake-up late last month in which several leftist ministers left
Anode president Fabien Chone told a public hearing at the
court on Wednesday that artificially low power tariffs make it
difficult for alternative power vendors to compete with EDF.
"The price caps are blocking the development of competition
in the market," he said.
He said that the law specifies that EDF's regulated power
tariffs must cover its cost of power generation, and that even
if the government announces its intention to change the law, it
must comply with current legislation.
Anode had asked for an expedited summary procedure because
of the importance of the case. A summary procedure allows the
court to suspend the execution of a disputed administrative
decision pending an investigation of the complaint and court
ruling on it.
The State Council (Conseil d'Etat) has in the past overruled
government caps on power prices. In April, it ruled that a July
2012 cap on power tariff increases decided by the previous
government was illegal and ordered the government to implement a
backdated tariff increase.
In January 2013, the court also annulled government-imposed
limits on 2011 and 2012 gas price increases for consumers.
Royal's cap on tariffs is part of a Europe-wide trend to
limit energy price rises as governments try to bolster consumer
spending in the face of stubbornly high unemployment.
In the past decade, successive French governments from the
left and the right have limited increases in regulated power
tariffs, which has made it difficult for new entrants to win
market share from former monopoly provider EDF.
Since France's residential power market was opened to
competition in 2007, alternative suppliers had won a market
share of just 8.3 percent, or 2.6 million of 31.3 million
household sites at the end of March, according to energy market
In terms of volume of power sold, alternative suppliers -
which include Direct Energy and Belgium's Lampiris - had a
market share of 6.1 percent of the residential market.
The industrial market is more open and top European
utilities such as Iberdrola, Vattenfall, E.ON
, Enel, Alpiq and Axpo sell power
to big French clients, giving alternative suppliers 24.2 percent
of the volume sold to non-residential sites.