France sees EU power price clawback generating up to 7 bln euros

French Minister for Economy, Finance, Industry and Digital Security Bruno Le Maire attends a news conference to present French government 2023 budget bill at the Bercy Finance Ministry in Paris, France, September 26, 2022. REUTERS/Benoit Tessier

PARIS, Oct 5 (Reuters) - The French government expects a new clawback on power companies' revenues to generate up to 7 billion euros ($6.96 billion) that can be used to help firms struggling with their energy bills, Finance Minister Bruno Le Maire said on Wednesday.

EU energy ministers agreed on Friday to cap non-gas power producers' market revenues at 180 euros per megawatt hour (MWh) on the grounds that exceptionally high prices mean they have reaped big gains without their operating costs rising. read more

After meeting with energy companies, Le Maire told a news conference that the French government would introduce the measure in the 2023 budget bill currently going through parliament.

"This mechanism is going to bring in 5 to 7 billion euros, which will allow us to finance important support for companies in difficulty and also local governments struggling to make ends meet," Le Maire said.

Le Maire said France needed to double the 3 billion euros already budgeted for helping companies that need it cover their energy bills.

When power companies sell electricity at over 180 euros per MWh the state will collect the difference, potentially reaping large gains with forward prices for 2023 currently at 524 euros MWh.

Amid reports of some companies pushing clients to sign new contracts at higher prices, Le Maire said that energy companies had also signed up to a charter that commits them to ensuring consumers are warned two months before the end of their contract and ensure that clients have a provider of last resort.

With power prices being pushed higher by surging gas prices, Le Maire said France continues to examine ways to decouple the two.

France's CRE energy regulator said earlier on Wednesday that the country's gas storage facilities were 99% full ahead of winter, although people in the country would still have to try and reduce their energy consumption given high prices and market tensions. read more

($1 = 1.0063 euros)

Reporting by Sudip Kar-Gupta, Myriam Rivet and Leigh Thomas Editing by GV De Clercq and Kim Coghill

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